New US sanctions on the horizon: possible impact on travel
An international investigative online outlet has received information regarding potential new US sanctions against Hungarian individuals.
According to index.hu, VSquare, an international investigative outlet, reported on these potential sanctions in a newsletter. Based on their information, Joe Biden has informed several of his European allies that Washington may introduce new sanctions against Hungarian individuals. An insider at the outlet suggested that the reason behind these sanctions is corruption.
No further details have been disclosed in this matter. As a result, we remain uncertain about who the targeted individuals will be, when the resolutions will come into effect or the nature of the restrictions to be imposed. Nonetheless, VSquare speculates that even Prime Minister Viktor Orbán may interpret them as personal attacks. This implies that the sanctions may affect members of the Hungarian political and business elite, possibly impacting their ability to travel or engage in trade.
Regrettably, such measures have a history in the US-Hungary relationship. In April, the US imposed sanctions on the leadership of the Russian International Investment Bank, which was previously headquartered in Budapest. One of the individuals targeted was Imre Laszlóczki, the Hungarian deputy director of the bank.
At the time, David Pressman, the British ambassador in Budapest, stated that the bank, funded by the Kremlin, posed a threat to European countries and their allies. The Hungarian government responded promptly, with Hungary withdrawing from the IIB, recalling its officials, and the bank subsequently leaving Hungary. We reported on this development HERE.
Moreover, the United States restricted the visa waiver programme for Hungarian passport holders in August, citing unspecified security policy reasons. You can learn more about the actual reason behind this move HERE. Prior to that, the US unilaterally terminated a vital double taxation treaty. For more information on this matter, refer to THIS article.
The Orbán-Biden conflict driving sanctions, restrictions and challenges
The conflict between the Orbán and Biden administrations has been ongoing for years. Orbán has openly supported Trump, maintained ties with Russia, regularly criticised Washington for its support of Ukraine, vehemently argued for peace in Ukraine and fostered strong relations with China. Orbán is scheduled to travel to China next week to meet Xi Jinping amid growing tensions between the US and China. Furthermore, Orbán has not given the green light for Sweden’s accession to NATO.
Index believes that any announcement of new sanctions will likely come from Ambassador Pressman, although he has not yet given any indication of such announcements.
Zsolt Bayer, one of the prominent pro-government publicists, was outraged by the news of potential new sanctions. In a furious blog post, he expressed his desire to be among those targeted by the sanctions. Bayer referred to members of the Biden administration as “double-zero assholes,” “black belt villains” and “self-defeating idiot scoundrels” (. Furthermore, he referred to Ambassador Pressman as an “old, soft grouch.”
Finally, positive news on Hungary’s trade surplus
Hungary’s trade surplus was 559 million euros in July and its trade balance improved by 1.9 billion euros compared with the same month last year, the Central Statistical Office (KSH) said in a second reading of data on Monday.
Hungary trade surplus at EUR 559 m in July
Exports rose by an annual 3.3 percent to 11.3 billion euros. Imports decreased by 13 percent to 10.7 billion euros, KSH said.
Hungary’s terms of trade improved by 8.3 percent as the forint firmed 6.2 percent to the euro and 14 percent against the dollar.
Trade with other European Union member states accounted for 76 percent of Hungary’s exports and 72 percent of its imports during the month.
In January-July, Hungary’s exports increased by an annual 10.4 percent to 88.7 billion euros, while imports slipped 0.7 percent to 83.8 billion. In volume terms, exports were up 6.2 percent, while imports decreased by 0.3 percent. The trade surplus came to 4.9 billion euros, with the trade balance improving by 9.0 billion euros.
Hungary PMI up at 47.4 in September
Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) rose to 47.4 points in September from 46.7 in August, remaining under the 50 point threshold that signals expansion in the manufacturing sector, Halpim, the compiler of the index, said on Monday.
The new orders index fell from the previous month and was under the 50-point mark.
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There are a bunch of reasons that make Propiy the best choice for traders.
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Furthermore, there is an approach that takes place for capable traders eager to begin trading in diverse markets without going through the two-phase challenge called Jetjump.
Market leader Porsche subsidiary introduces the euro in Hungary
More and more signs make it clear that spontaneous euroisation began in Hungary because of the volatile forint. But a German carmaker made that official. The price of some of its new car types is only in euros. Of course, customers have to pay in forint. But it is easier to “freeze” the price in a less volatile currency than regularly changing it.
As we wrote in THIS article, more and more Hungarians are keeping their savings in foreign currencies, mostly in the EU’s official currency. That is because of the volatile exchange rate of the forint. As we wrote earlier today, the Hungarian national currency did not need much to lose some of its value. A clash between the finance minister and the national bank governor was enough for it to leave the 380-385 level and approach the 390/EUR psychological barrier.
Therefore, it is not surprising that not only people but also companies believe that keeping money in forint or sharing the price of valuable cars in forint is no longer reasonable.
Portfolio, a Hungarian economic news outlet, said Porsche Hungária no longer prices its new cars in forint. You may see forint prices only when buying an Audi or a Volkswagen commercial vehicle. If you opt for a new Volkswagen or Skoda, the price will be in euros. Of course, you will pay in forint, but the vendor will use the daily exchange rate to do the maths.
Read also:
Porsche says it was an economic decision
Porsche Hungária told Portfolio that they turned to euro-based pricing last December. The change concerns new Volkswagen, Skoda, Seat and Cupra cars. Audi and Volkswagen commercial vehicles’ pricing remained in forint. “That was an economic decision on our part”, the company highlighted.
The car’s price is fixed in euro, but the customers pay in forint, they highlighted. When they order the car, the price written in the contract is in euros. And that remains unaffected by the exchange rate changes until they get their new vehicle.
Viktor Zsiday, the portfolio manager of Citadella Fund, said that when different players of the Hungarian economy start to price in euro, that trend weakens the effect of the country’s economic policy. The more common a foreign currency becomes somewhere, the less influence the national bank can have on the economy. Spontaneous euroisation happens because the Hungarian economic policy makers abused their tools and intentionally weakened the forint.
Hungarian e-commerce sector changes drastically thanks to groundbreaking acquisition
Ingatlan.com Plc., a Hungarian company, acquired two flagships in the Hungarian e-commerce sector: Használtautó.hu and Jófogás.hu. That means the business sector will change significantly.
According to index.hu, Ingatlan.com Plc., a Hungarian property buy and sell website, bought Használtautó.hu and Jófogás.hu‘s operator, the Adevinta Classified Media Hungary Ltd. Használtautó is a second-hand and showroom car buy and sell website, while you can buy almost everything on Jófogás, including real estate and cars. Ingatlan.com did not share the buying price, but the acquisition can trigger a significant change in the Hungarian e-commerce sector.
After the transaction, the new business will have two control centres. One’s responsibility will be the Használtautó.hu and the Autónavigátor.hu. Meanwhile, the other will be responsible for Jófogás.hu and Vatera.hu, who left the eMAG Group this summer.
Read also:
- Another Hungarian restaurant awarded a green Michelin star – Read more HERE
- Dark prophecy for the Hungarian forint: 400 EUR/HUF soon?
A loss-making company bought them with state loan
Ingatlan.com wrote that the acquisition was supported by a state program, the Baross Gábor Reindustrialisation Program. The program provided the Hungarian company with a low-interest loan. The new owners said the acquisition might mean a significant change in the domestic e-commerce sector. That is because Hungarian companies have not been present in the sector’s top so far.
They added that such companies were regularly bought by international giants from the Hungarian founders. However, they said that global trend shows locally operated websites have become more successful recently. The new owners hoped that their thorough market knowledge would create development opportunities.
Adevinta Hungary employs 1,300 people. Based on open-source company data, in 2021, their traffic reached HUF 4.33 billion (EUR 11.3 million), while that sum went above HUF 4.55 billion (EUR 11.86 million) in 2022. HUF 300 million came from foreign purchases each year. However, the company was not profitable. In 2021, their loss was HUF 39 million. In 2022, that climbed to HUF 329 million (EUR 860,000).
Hungarian airport purchased by Far Eastern businessman
The Hungarian military’s Taszár airport was bought by a company owned by a Taiwanese billionaire, Frank Liu.
According to mfor.hu, the Taszár military airport operated until 2005, when the Hungarian military closed it due to financial reasons. In 2009, most of its territory was sold to KaposBusz, while the remaining buildings deteriorated during the time. We had to wait until 2023 to find a new owner for the property.
The government designated the purchaser in 2021 with a decree. SGF Silu Global Fund Holding Ltd. was a newly-founded company. Their task was to create a commercial airport there. However, they failed to do so, hence the government withdrew its decree and sought for a new owner via an online auction.
Taiwanese businessman at the end of the ownership chain
However, neither the Hungarian National Asset Management Inc. nor the politicians and government officials shared who purchased the airport. The auction closed on 31 March, and the airport was sold for HUF 3.6 billion (EUR 9.33 million). The buyer turned out to be Billion Up Ltd., registered in Budapest. The company’s owner is Billion Up Development Limited, a firm founded in 1991 in Hong Kong. The CEO is Hsieh Yi-Chen who bought the famous Pápai Hús in 2016 through his Famous Yield Enterprises Limited. Furthermore, the seat of the two companies (Famous Yield & Billion Up) happens to be on the same Hong Kong office building’s 11th floor.
Read also:
- Skyrocketing plane ticket prices after government acquisition of Budapest Airport? – Read more HERE
- Hungarian government makes formal bid for Budapest Airport
Both two companies are related to Chang Pei-Chi, the CEO of multiple Hungarian companies, including Chi Fu Taszár Ltd and Chi Fu Pápa Ltd. The Chi Fu Central Europe Ltd’s owner is Frank Liu, a Taiwanese businessman, who is also a Hungarian citizen. We wrote HERE that Deputy Prime Minister Zsolt Semjén and President János Áder decorated Mr Liu with the Hungarian Golden Cross of Merit in 2021 for his efforts in advancing trade relations between Hungary and China.
Here are two photos of the airport:
Unleashing the Power of Online Investment: A Guide to Navigating the Digital Financial Frontier
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Unprecedented trade surplus data may help forint
Hungary’s trade surplus widened to 1.481 billion euros in June from 1.129 billion in May, the Central Statistical Office (KSH) said in a first reading of data on Tuesday.
Exports grew by an annual 11.1 percent, to 13.380 billion euros, while imports decreased by 4.7 percent to 11.899 billion. Trade with other European Union member states accounted for 77 percent of Hungary’s exports and 71 percent of its imports during the month.
In January-June, Hungary’s exports rose by 10.8 percent year on year, to 76.920 billion euros, while imports were up 1.4 percent at 72.890 billion. The trade surplus was 4.030 billion euros. According to Gábor Regős, the leading analyst of the Makronóm Institute, the good news about Hungary’s current balance may help forint to strengthen, Index wrote.
Hungary greenhouse gas emissions down 7 pc yr/yr, close to 2030 target
Hungary’s greenhouse gas emissions fell by 7 percent in 2022 compared with 2021, the energy ministry said on Tuesday, citing the National Meteorological Service (OMSZ) which sends approximate data on emissions to the European Commission at the end of July each year. Since 1990, emissions have fallen by 37 percent, the ministry said in a statement citing the preliminary data.
Industrial emissions were down 18 percent year on year, while those contributed by agriculture declined by 12 percent. Transport-related emissions increased but the upward curve flattened, the statement added. Total emissions of Hungarian businesses registered in the EU Emissions Trading System (ETS) fell by 12 percent in 2022.
Eurostat data from June indicates that Hungary cut its carbon dioxide emissions from energy use by 8.6 percent, to the greatest extent after the Benelux countries, the statement said. Final data will be released in spring 2024.
Hungarian manufacturing sector not doing well, unlike trade
Hungary’s seasonally-adjusted Purchasing Managers Index (PMI) rose to 45.7 points in July from 44.6 in June, remaining under the 50-point threshold that signals expansion in the manufacturing sector, Halpim, the organisation that compiles the index, said on Tuesday.
Among the PMI sub-indices, the new orders index rose from the previous month but was under the 50-point mark, Halpim reported. Last month, respondents reported price increases for packaging materials, electronic components, paint, fruit, duck meat, oil, paper raw materials and firewood.
Trade surplus widens to EUR 1.129 billion in May
Hungary’s trade balance posted a EUR 1.129 billion surplus in May, widening from EUR 366 million in April, the Central Statistical Office (KSH) said in a second reading of data on Tuesday.
The surplus was lowered from EUR 1.089 billion in the first reading released on July 10. Exports grew by an annual 6.2 percent to EUR 13.004 billion, while imports fell by 4.8 percent to EUR 11.875 billion. In the January-May period, Hungary’s exports grew by 10.7 percent year on year to EUR 63.540 billion, while imports rose by 2.6 percent to EUR 60.991 billion. The trade surplus was EUR 2.549 billion.
Featured image: illustration (Unsplash)
Kyrgyz foreign minister Jeenbek Kulubaev held talks in Hungary
Hungary started building ties with central Asia before other players, and now enjoys a competitive advantage in a region with growing importance, the minister of foreign affairs and trade said after meeting his Kyrgyz counterpart, Jeenbek Kulubaev, in Budapest on Monday.
Péter Szijjártó told a joint press conference with Kulubaev that in the wake of the war in Ukraine and the resulting sanctions on Russia, well-used transit routes and trade relationships had become “practically impossible”.
As a result, “physical trade routes and the supply routes of some resources moved to central Asia. Hungary, and observer in the Organisation of Turkic States, has a strategic advantage in the region … and has brought that advantage to fruition,” he said.
Hungarian-Kyrgyz trade volume jumped by a record 71 percent last year and 3.5-fold this year already, he said.
Earlier economic agreements brought excellent opportunities for Hungarian companies in the modernisation of Kyrgyzstan’s water management and irrigation system, and several projects in food processing, Szijjártó said. A Hungarian company will start a solar power plant investment project soon, he said, adding that joint steel production in Bishkek is so far worth 2.5 billion forints (EUR 6.6m), he added.
Cooperation in education is also gaining momentum, the two countries’ rectors’ conferences have recently met, and Hungary offers 200 grants per year to Kyrgyz students wishing to study here, he said.
Szijjártó also called for strengthening ties between the European Union and Central Asia. He called on the EU to finally ratify a strategic partnership agreement with Kyrgyzstan that was finalised in 2019.
On the war in Ukraine, Szijjártó said Kyrgyzstan and Hungary were both members of the “global pro-peace majority”. “Both countries have paid heavily for the war in Ukraine which they are in no way responsible for,” he said.
“We both think there is no solution to this war on the battlefield … and so we want a ceasefire as soon as possible, and want to play a role in keeping channels of communication open,” he said.
At the third meeting of the Hungarian-Kyrgyz strategic council, the two countries signed an agreement on environmental protection.
Responding to a question on Hungarians evacuated from the Greek island of Rhodes where wildfires are raging, Szijjártó said that 80 Hungarians had been evacuated so far. The foreign ministry is in contact with 122 Hungarians on the island, he said, and called on them to register on the consulate’s website for assistance.
As we wrote this year, Kyrgyz President Japarov held talks with Hungarian President Novák, details HERE.
Big improvement in the Hungarian trade balance
Hungary’s trade surplus reached EUR 1.089 billion in May, widening from EUR 366 million in April, the Central Statistical Office (KSH) said in a first reading of data on Monday.
Exports rose by an annual 5.2 percent to EUR 12.879 billion, a moderate increase, as in April, following a year of double-digit growth. Imports decreased by 5.4 percent to EUR 11.790 billion, falling for the second month in a row after climbing for over two years.
Trade with other European Union member states accounted for 77 percent of Hungary’s exports and 69 percent of its imports during the month.
In January-May, Hungary’s exports increased by an annual 10.5 percent to EUR 63.415 billion, while imports rose by 2.5 percent to EUR 60.906 billion. The trade surplus reached EUR 2.509.
Minister to visit Hungary’s 9th largest trading partner
Economic Development Minister Márton Nagy is travelling to China to meet government and economic players crucial for the Hungarian economy, the ministry said on Wednesday.
Nagy will meet representatives of the Chinese Ministry of Industry and Information Technology, China Development Bank, the Export-Import Bank of China and Huawei, the statement said.
China is Hungary’s 9th largest trading partner, with trade volume at USD 13 billion, the statement said.
“China is one of the most significant economies in the world which has seen extraordinary development in the past decades and has turned it into a technological superpower, and the role of the yuan and investments are increasingly significant. Chinese investments in Hungary are growing, with 3 percent of R + D + I coming from China,” Nagy said.
New investments are also key to protecting families, jobs and a steady wage increase, he said.
Remarkable achievement: Hungarian forint becomes one of the best in the world
The Hungarian forint has experienced a remarkable turnaround this year, following its historic low in the previous year. Since the beginning of 2023, the currency has appreciated by nearly 7 percent against the euro and 8.3 percent against the dollar.
Although the Hungarian National Bank (MNB) started reducing the policy rate in May, it did not weaken the forint significantly. This was due to the continued high interest rates in Hungary, writes Portfolio.
Behind the scenes
Reports from the market indicate that the benchmark interest rate increase to 18 percent has made the forint one of the most sought-after investments. Not only in the region, but globally as well. The high interest rate level presents favourable conditions for carry trades, enabling investors to benefit from significant interest rate differentials even without significant exchange rate fluctuations.
The substantial strengthening of the forint cannot be solely attributed to the high interest rates. Other contributing factors include positive international sentiment, the depreciation of the dollar and the decline in global natural gas prices over the past six months. Improved investor sentiment towards emerging markets and the favourable external position of the Hungarian economy, which heavily relies on energy imports, have also played significant roles.
Hungarian forint on the roll
Since last October, the forint has emerged as one of the world’s preferred investments. The currency has witnessed a nearly 20 percent increase against the euro from its lowest point. The performance of the forint this year further confirms its exceptional performance, surpassing most other currencies.
Over a six-month period, the forint strengthened by 8.3 percent against the dollar. It was second only to the Mexican peso, which experienced a gain of over 12 percent. The Brazilian real ranks third, followed by the Polish Zloty, which is one of the main competitors of the forint.
Although the forint’s performance over the last three months is not as outstanding, it still ranks seventh among mid-range currencies. This may be attributed to the fact that the euro-for-euro exchange rate reached a significant support level at 370. Furthermore, the MNB had already hinted at upcoming interest rate cuts in the previous month, with the first cut occurring in May.
What’s next?
Recent weeks have indicated that the Fforint’s strengthening may have reached a plateau. The currency may stabilise at around the 370 level and trade within a narrow range. According to analyst expectations, the MNB could set the base rate at 13 percent in September. This would still be almost double that of regional peers.
Nevertheless, risks remain for the forint, particularly concerning the fate of EU funds, which could present challenges in the second half of the year. If no agreement is reached, investors may refocus on this issue. This could potentially lead to the end of the forint’s upward trajectory, alongside further interest rate reductions.
More bad news for the Hungarian economy: both domestic trade and imports have fallen
Hungary’s trade surplus was at 366 million euros in April, narrowing from 886 million in March, the Central Statistical Office (KSH) said on Monday.
According to KSH, exports rose by an annual 2.2 percent to 11.350 billion euros, slowing sharply after a year of double-digit growth. Imports decreased by 5.6 percent to 10.984 billion euros, falling for the first time in over two years.
Hungary’s terms of trade improved by 3.6 percent as the forint edged down 0.2 percent against the dollar but firmed 1.1 percent to the dollar.
Trade with other European Union member states accounted for 78 percent of Hungary’s exports and 69 percent of its imports during the month.
In January-April, Hungary’s exports increased by an annual 12.0 percent to 50.536 billion euros, while imports rose by 4.6 percent to 49.116 billion euros. The trade surplus reached 1.420 billion euros.
As we wrote today, Hungarian manufacturing PMI fell significantly, and is now well into recession territory, details HERE.
There is a huge international demand for Hungarian fruit
Hungary’s sour cherry season has commenced, and the early varieties are being picked. The National Chamber of Agriculture (Nemzeti Agrárgazdasági Kamara – NAK) and FruitVeB, the Hungarian Fruit and Vegetable Interbranch Organisation and Product Council (Magyar Zöldség-Gyümölcs Szakmaközi Szervezet és Terméktanács), highlights that this year’s harvest promises high-quality, juicy produce.
Hungary is the third largest producer of sour cherries in Europe. Their unique taste, flavor, and nutritional value make these fruits highly sought after abroad, writes Agrotrend.
Domestic production
The harvesting of early sour cherry varieties has recently begun. In the coming weeks, Hungarian sour cherries will continue to appear in shops and markets. The sour cherry harvest typically begins in the Danube-Tisza area and concludes in the Szabolcs-Szatmár-Bereg region. This year, sour cherries are cultivated on 13,000 hectares in Hungary, with the largest production areas found in Szabolcs-Szatmár-Bereg, Heves, Pest, Győr-Moson-Sopron and Bács-Kiskun counties.
On average, the annual sour cherry yield reaches around 60 thousand tonnes. Experts predict a near-average quantity this year, despite challenges such as spring frosts, inclement weather during the flowering period, and temperature fluctuations during fruit set. While these factors have led to a significant reduction in crop setting, the remaining fruit is larger in size. This will result in a national harvest that may be only 15-20 percent lower than last year. The increased use of crop protection measures has helped mitigate the damage caused by moniliaceous infestation.
Based on a survey conducted by the National Chamber of Agriculture and FruitVeB, the most extensively cultivated sour cherry varieties in Hungary include Érdi bőtermő, Újfehértói bürtös, Debreceni bőtermő and Kántorjánosi.
International export
The average domestic consumption of sour cherries ranges from 10,000 to 15,000 tonnes per year. In addition to fresh sour cherries, preserves are also highly popular and available throughout the year on store shelves. Hungarian-bred sour cherry varieties, known for their excellent flavour, are in great demand in the German market. A significant portion of domestic sour cherries, typically 60-80 percent, end up abroad, predominantly in Germany. A considerable amount is used for cherry preserves.
In general, Hungarian sour cherries find applications in various industries, including canning, refrigeration (frozen), juice production, fresh markets, drying and pálinka production, among others.
PHOTOS: Ferry service inaugurated on Hungary-Slovakia border
Foreign Minister Péter Szijjártó on Thursday inaugurated a new ferry service between Neszmély in Hungary and Radvan (Dunaradvány) in Slovakia.
The HUF 2.2 billion (EUR 5.9 million) project was co-financed through European Union support, Szijjártó said at the inauguration. The service will have capacity to carry 80 pedestrian travellers or 40 pedestrians and 8 vehicles and will run 8 times a day on weekdays and 16 times a day on weekends, a ministry statement quoted Szijjártó as saying.
Having as many border crossing points as possible between Hungary and its neighbours is of strategic importance, Szijjártó said. Whereas in 2010 Hungary and Slovakia had just 22 border crossing points between them, they now have 36, owing to an agreement between Hungarian Prime Minister Viktor Orbán and former Slovak premier Robert Fico, Szijjártó said.
“The opening of every such crossing point spares us an unworthy situation,” Szijjártó said, noting that the Slovak minister had to travel an hour by car from Radvan to get to a point which he could see from across the Danube.
Szijjártó said Hungary and Slovakia will open four more crossing points this year, namely three bridges over the River Ipoly and one road crossing in the east.
Being a landlocked country makes it strategically important for Hungary to have enough border crossing points with its neighbours, Szijjártó said. This is especially true in the case of Slovakia, with which Hungary shares its longest border section, he added.
Slovakia is Hungary’s top trading partner, with bilateral trade turnover reaching a record EUR 17 billion last year, Szijjártó said, adding that it was the fourth most important investment destination for Hungarian businesses.
He praised bilateral cooperation, saying Hungary and Slovakia contributed to each other’s economic growth and security.
Construction, home renovation in Hungary? Now is the time!
The demand for construction materials has plummeted, with sales dropping by a third in both value and volume in May. The decline is worsening month by month, indicating a worrisome trend. Renovations are on the decline, and few new construction projects are being initiated. With the falling prices on the construction market, there has never been a better time to start building our new home or renovating the current one.
In the first five months, building materials traders experienced a sharp decline in turnover. The market declined by 24 percent compared to the previous year. Distributors reported a 32 percent decrease in sales and a 35 percent decrease in turnover in May. This growing backlog compared to the previous year is cause for alarm. However, there are no signs yet of the trend reversing, writes Világgazdaság.
Construction at all-time low
Attila Juhász, President of Új Ház Építőanyag Nagykereskedelmi Plc., expressed concerns about the building materials market’s development this year. Despite maintaining home-building subsidies, the population is not undertaking new constructions due to increased credit costs. New single-family housing has been hit hardest, with a 40 percent decline in orders.
According to data from New House (Új Ház), turnover declined by 22 percent in the first four months of the year. In May, this decrease was up to 24 percent. This indicates an accelerating pace of decline. In May alone, the year-on-year decline in value terms reached 32 percent, with volume sales dropping by 35 percent.
On the bright side, the ease of finding a contractor has improved, with average lead times halved. However, if order books remain low for an extended period, there is a risk of contractors migrating abroad. This, by fay, undermines the perceived benefits of the current situation for customers.
Pessimist outlook
Although there have been some price reductions in certain product areas, construction material prices are stagnating overall. Furthermore, there are no prospects for significant price reductions in the medium to long term, according to Juhász. The market, which experienced significant overheating due to home renovation subsidies last year, is now facing a more widespread downturn than anticipated.
Without intervention, the expert projects a further decline in the building materials market, with serious challenges for the construction industry and the entire supply chain. Building materials factories may even face closure.
The lack of major investments is being felt, although the impact on building materials distributors is less severe than in the residential market. Failure to stimulate renovation and construction for an extended period will make it more costly and challenging to revive the sector. Additionally, the number of detached houses under construction is gradually halving compared to the previous year, further impacting the revenues of Hungarian building materials retailers.
The world’s finest Pepsi, based on Hungarian mineral water
Levente Balogh, CEO of the Hungarian mineral water company Szentkirályi confirmed that starting in 2024, Pepsi will be produced from water found in Szentkirály. This is why they acquired one of the world’s most modern bottling production lines, capable of filling not only mineral water but also soft drinks.
These are not just rumours anymore, Pepsi will in fact move to Hungary next year. This means that the bottling of soft drinks, which is currently destined for Austria, the Czech Republic and Romania, will now take place in Szentkirály, Hungary, writes Világgazdaság.
Hungarian Pepsi
In 2018, Central Europe Mineral Water Holding (CEMW) acquired the Hungarian interests of the American company. This made them the exclusive distributor of PepsiCo beverages and food products in Hungary. Following the transaction, the Hungarian businessman became a significant minority owner and has since held the position of CEO.
Balogh stated that the newly inaugurated PET bottling facility in Szentkirályi is suitable for filling Pepsi products. The machine, used for bottling both mineral water and soft drinks, costs 20-30 percent more than a device exclusively designed for mineral water. According to him, they purchased the more expensive equipment because they want to bring Pepsi production home. In 2015, Pepsi moved abroad from Soroksári Road, and the 40,000-square-meter area became a logistics center for the company.
However, starting next year, the soft drink will be made from Szentkirályi water. This will save considerable transportation costs and time, and will make the venture profitable and worthwhile.
The company will continue to expand
Levente Balogh also mentioned that when he was a child, he often dreamed of owning the rights to massive foreign brands like Pepsi. At the time, however, he believed it would be easier to build his own. He believes that creating a brand is only possible by manufacturing products with the world’s best technology.
“Many consumers think that purchasing branded products is just showing off. But it’s not true: to have a strong brand, safe and high-quality production is necessary,”
emphasised the CEO of Szentkirályi.
He added that brands have the highest chances of surviving during crises. This was the case during the world wars and is also currently happening due to the difficulties caused by the coronavirus and the Russian-Ukrainian conflict.
The company has announced that they had decided on a five-year development plan back in 2022. As a part of this plan, they are planning to invest HUF 10 billion (EUR 27 million) in the near future. The recently completed investment accounts for nearly HUF 3 billion (EUR 8 million) of the total amount.