NEWS

Japanese electronic equipment manufacturer Sanyo has commenced production at its plant in Dorog, Northern Hungary.

Currently 100 employees work at the new facility assembling cooling units for air conditioners. Sanyo will gradually increase the number of employees to 350 by the end of 2008.  The new 8,000 square metre assembly hall was built at a cost of $25 million.

The Hungarian unit of German premium car maker Audi AG has announced on Thursday the production of TT models was up five-fold in the first quarter of 2007

Audi Hungária sold 15,740 Audi TT models in its Gyõr (northwest Hungary) plant, compared to 3,107 in the same period of 2006. Of these models 10,764 were Audi TT Coupés and 4,976 Audi TT Roadsters. The company produced a total of 513,675 engines in Q1, up 4% from 493,831 in January-March 2006.)  Besides manufacturing the TTs, the factory also sells a series of motors to European car manufacturers including Volkswagen, as well as its parent, Audi. For years Audi has been one of Hungary's highest-revenue companies and one of the largest exporters, as well. In 2006, it boosted engines production 12% yr/yr to 1,893,600 units. A total of 23,675 Audi TT Coupé TT Roadster models rolled out of its manufacturing lines

Italy's Benetton plans to launch a HUF 15 billion (EUR 61 m) complex factory construction project in Nagyatád (southwest Hungary

In the first phase of the project Benetton would build a wood processing and a pellet making factory (see box) on a 5-hectare plot on the outskirts of Nagyatád. The facility would also feature a biogas plant that would supply energy to the complex, an office building and a large logistics centre. In the second stage of the investment Benetton will deploy the production of light industry products in the town. The total value of the project is seen exceeding HUF 15 billion. Ormai said the area belongs to Drawa Agricultural and Forestry Bt, which is co-owned by Italian company Proposta Immobiliare s.r.l. No information is available about whether Proposta is a member of the Benetton group.

HI-LEX choose Hungary to establish its second European plant

In 2007, Opener, Manual Transmission and Clutch cable products for Honda, Suzuki and Toyota-Peugeot-Citroen will be transferred to the new facility at Retsag Industrial Park for final assembly, inspection and shipping to the customer. In 2008, the facility will start assembly operations for a series of new products for Ford of Europe. Further expansion to 13,000m² will be considered in phase 2. The European Technical Centre based in South Wales will support both UK and Hungarian operations. Depending on European Customer requirements and business growth, additional engineering support and test facilities could easily be accommodated within HI-LEX Hungary Kft. The manufacturing facility in Port Talbot is now reaching full capacity and to enable the continued growth of HI-LEX in Europe, a second manufacturing facility was required under the management of the HI-LEX European Headquarters.

The selection of Central Europe for the new facility was in part due to lower overall labour costs but also the geographic spread of existing and potential customers as well as the wish to establish a Purchasing Office to source competitively priced components in Central and Eastern Europe for use at HI-LEX European manufacturing operations. Hungary, the Czech Republic, Poland and Romania were considered and full business plans drawn up for 10 locations throughout these regions. The final selection was based not only on a prudent financial analysis but also on subjective factors including communications, infrastructure, labour skills and political stability and support grants. In addition Hungary was chosen as it lies at the heart of “New Europe” which now comprises 27 states and its close proximity to the major European automotive power-house of Germany, where HI-LEX Europe already has substantial business. It is also ideally located to support major automotive expansion in such countries as the Czech Republic, Poland, Slovenia and Slovakia as well as in Russia, which is developing itself to become a large contributor of automotive volumes to Europe as a whole. „The establishment of HI-LEX Hungary Kft. is a key milestone in the international history of the HI-LEX Corporation and its continuing growth in Europe.”-said Mike LewisEuropean Director of HI-LEX Corporation. “HI-LEX Hungary Kft. will play a pivotal role in the further successful growth and expansion of the international HI-LEX Corporation in Europe.”-he added.

Japan's auto parts maker Denso has announced that it will spend over HUF 10 billion on the expansion of its Hungarian production capacity

Denso Manufacturing Hungary Ltd. will build a new 9,600-sqm production hall at its Székesfehérvár unit (60 km west of Budapest), Denso Hungary Chairman Yukimasa Ohoka and Economics Minister János Kóka announced on Thursday. The capacity boost will create 1,100 jobs by the end of 2008, which means the Japanese company will have nearly doubled its workforce in eight years since it has operated in Hungary. Denso Hungary currently has a staff of 4,174 in its Székesfehérvár facility. It produces common rail systems, electronically controlled injection pumps, variable cam timing and other engine related components. "With the increasing demand in Europe for common rail systems, we decided to enhance our production capability in Hungary," said Hiromi Tokuda, senior managing director in charge of Denso's Powertrain Control Systems and Electronic Systems Business Groups when Denso first announced its capacity boost in November last year. "We plan to increase annual production volume of common rail systems to 1 million units by fiscal year 2008, from the 650,000 units projected for fiscal year 2006," he added. Hungarian exports to Japan totalled USD 298.87 million in January-October 2006, up 1.6% yr/yr, while imports dropped 4.7% to 1.802 bn in the same period. The key exports products are machinery, equipment, office tools, frozen pork, base materials for the chemical industry and goose liver. Imports mainly include cars and car parts and electronic products and parts. Carmaker Suzuki was the first Japanese company to set foot in Hungary after the change of regime in 1990. Since then it was followed by some 100 companies, which created 16,000 jobs.

The Hungarian Investment and Trade Development Agency (ITDH) currently manages 14 projects with Japanese interest. The planned investment volume of 9 projects may reach EUR 131 million. According to the Budapest office of the Japan External Trade Organisation (JETRO), Hungary gives home to 48 fully-owned Japanese investments, dealing in manufacturing (27), trade (16) and other (5) areas.
 
Hungary has the fifth fastest-growing industry in the world, the Economy Ministry said on its website yesterday, citing numbers from The Economist.

Industrial output rose a working-day adjusted 14.0% and an unadjusted 8.7% in December compared to December 2005. Full-year industrial output rose 10.1% in 2006. Full-year figures show industrial output for export sale rose 14.6%.

DHL, the world's leading express and logistics company, is to build a three-hectare logistics centre in Budapest, pumping HUF 4.5 billion (EUR 17.88 m) into the project.

The logistics base is to become a strong support for DHL Express Hungary Ltd., which has a leading position on the domestic air freight sector. The company currently has a staff of 1,500, up 10% from 2005. The project includes the construction of a 7,000-sqm warehouse, a 1,400-sqm office building and a 4,000-sqm central office building.

Configuration and distribution center located in Hungary to serve Sierra Wireless customers in Europe, the Middle East and Africa

3GSM World Congress, Barcelona, Spain – Sierra Wireless (NASDAQ: SWIR - TSX: SW) today announced that based on increased customer activity in the EMEA region, the company has expanded its relationship with Flextronics, its manufacturing partner, to add a configuration and distribution center for Sierra Wireless products in Zalaegerszeg, Hungary. The Zalaegerszeg Center is now operational and supporting configuration, customization, packout, warehousing, and reverse logistics for the company’s EMEA customers. The addition of the new distribution center significantly reduces time required to deliver product to EMEA customers, and allows for greater flexibility in meeting customer specific product requirements and changes. “Wireless data technology is evolving quickly, and Sierra Wireless is committed to working with our customers and distribution partners to deliver wireless data products to meet customer demand,” said Bill Dodson, Senior Vice President of Operations for Sierra Wireless. “The new Zalaegerszeg Center helps us to improve the level of service we can offer customers in the EMEA region, and allows us to be more flexible and responsive to their needs. We believe this will be of significant value to them, and that makes it the right move for the company.”

HUF 50bn investment announced: output to increase by 38% in 2007, 1,000 jobs to be created. Magyar Suzuki Zrt, the local division of Japan's Suzuki Motor Corp, has announced what it says are plans for "stable and continuous growth" for 2007, with a production goal of 300,000 cars by 2008.

Magyar Suzuki says this "long term production capacity expansion" dates back to 2004, but the real peak in investment will be seen this year. The automaker says it plans to continue pumping cash into its operations. Last year's investment exceeded HUF 50bn ($250.8m), but a statement issued by the company on Thursday, Jan 25, said "This year the company plans more than last year for further capacity expansions which will be divided between the production units and modernization and expansion of equipment/tools at suppliers." With some 164,000 cars rolling off the production line in 2006, there had been a 20% increase in unit numbers compared to 2005. The plan for this year will beat that. "The company plans to exceed a 38% unit number increase in 2007."

A second pressing machine is to be installed and begin trial operations from February this year, and another 250 robots (principally for welding) will be added to the 400 already in use. And it is not only robots that are being added to the work force. A further 1,000 people are to be added to the 4,800 workers employed by Magyar Suzuki. "As a positive result of capacity expansion the supplier circle will also expand by this means providing work opportunities for many more people in small and medium size enterprises," said PR Manager Viktória Ruska. A "significant amount" of the investment will go on trial production at Suzuki's Esztergom base of the Splash, the successor model to the Wagon R, in the fourth quarter of this year. The Japanese mother company is looking for sales overall to rise by 8% this year (despite an expected contraction of its Japanese market) based on strong overseas growth, with a target of 2.35m cars sold worldwide. To that end, production is being ramped up, not only in Hungary, but in India and Pakistan too.

Hungarian automotive group Rába has won a 4.6m euro, four-year deal to supply Magyar Suzuki (through Japanese parts manufacturer Toyo Seat) with seat frames. Rába Jármuipari Alkatrész-gyártó Kft has been looking to strengthen its links with Magyar Suzuki. This one deal alone would represent more than 2% of Rába's 2005 revenues. Toyo Seat has expanded its capacity in Hungary with a 7,000sqm greenfield investment in Nyergesújfalu (50km north east of Budapest), worth 7.5m euro (Ft1.9bn) and expected to create 200 jobs. Suzuki Motor Corp, will cover 15% of the investment, and Magyar Suzuki 20% of construction costs.

Leading communications technology firm Nokia has announced on Friday that it will further expand its Komárom plant (northwest Hungary), investing EUR 10 million in the project.

Construction of the new building, in which Nokia will deal with delivery-related tasks, will be launched soon, Nokia said in a statement. The new facility will sprawl on 10,000 sqm and is to be completed by August this year. Mobile phone production kicked off in the Komárom plant seven years ago and the factory produced its 300 millionth handset (a Nokia 2310) at the end of 2006. “The new investment indicates that Nokia remains committed to Hungary and the Komárom plant," said Timo Kahelin, chief executive of Nokia Komárom Kft. In January 2004, Nokia decided to expand the Komárom unit and pumped more than EUR 50 million into it, widening the production area to over 50,000 square metres. The factory currently operates with a staff of some 4,000 people, but Nokia said it would recruit additional workers.

Construction of the new building, in which Nokia will deal with delivery-related tasks, will be launched soon, Nokia said in a statement. The new facility will sprawl on 10,000 sqm and is to be completed by August this year. Mobile phone production kicked off in the Komárom plant seven years ago and the factory produced its 300 millionth handset (a Nokia 2310) at the end of 2006. “The new investment indicates that Nokia remains committed to Hungary and the Komárom plant," said Timo Kahelin, chief executive of Nokia Komárom Kft. In January 2004, Nokia decided to expand the Komárom unit and pumped more than EUR 50 million into it, widening the production area to over 50,000 square metres. The factory currently operates with a staff of some 4,000 people, but Nokia said it would recruit additional workers.

The Hungarian unit of EDS, a leading global technology services company, is to boost its payroll by at least 300 employees this year. Last year it expanded its staff by 400 people to 1,450.

EDS Magyarország Kft., posted revenues of HUF 13.5 billion in 2006, up 10% from a year earlier. The company has targeted a similar growth for 2007, as well, business daily Világgazdaság reported on Thursday. EDS started its Hungarian office in 1991 and it claims to be present in almost every market segment with special focus on the telecommunications and financial industries. EDS Hungary has four Best Shore centres in three delivery locations, providing cost competitive multilingual service delivery at 30 different locations in Budapest and across the country. Its targeted markets are telecommunications, automotive, banking, government and transportation.

British Telecommunications, a member of the BT Group, is opening an office in Budapest to provide services for BT subsidiaries in Europe - Germany, Spain, France, Switzerland, Scandinavia and the Benelux states - and the United States, the company has announced on Friday.

BT Limited Magyarország business development director Péter Magyari told broadsheet Népszabadság they have already recruited the 30 people with an economic degree who will join the company by end-February. The support office is to operate with a staff of 60 people and will hire more than 40 by the end of 2007 when they open another office in eastern Hungary. The activity of the new unit has not been finalised yet, but India is also competing for the job. The new Business Support Office will primarily take care of administrative tasks related to sales and signed contracts, and will be responsible for the pricing of products and services, billing and the management of overdue claims, among others. In 2004, the company already tested services with a handful of employees, giving support to subsidiaries in the administration of contracts.

Magyari said one of the reasons BT (known formerly as British Telecom) picked Hungary was that the local staff is versed in the languages of every partner country. This is not the first service centre of BT in Hungary, as it opened a regional customer service centre in Budapest in 2004.

The first regional support centres appeared in Hungary in 2000 and nearly 40 of them are operating here currently, including that of EDS, ExxonMobil, IBM, Sykes and GE, which created 500-1,500 jobs each and are expanding their activities continuously. About a dozen multinational companies, including Diageo, Avis Europe and Cisco-Getronics, have also set up regional support centres with staffs of 50-500 in the country. The government supported the establishment of 14 support centres in the past three years. These undertook to create 7,584 jobs in total. On top of this, IBM has opened 134 jobs in Hungary and Diaego and SAP have created 300 new jobs each. Hungarian Investment and Trade Development Agency (ITDH) actively took part in the establishment of another 21 support centres in the past years. According to Economics Ministry data, these created 4,600 new jobs. The Food and Agriculture Organisation (FAO) for the United Nations decided in late November last year that it would move its European and Central Asian regional centre to Budapest from Rome . One of FAO's services centres will also be relocated to Budapest.

Magyar Bioenergetikai Zrt (Mabio) will build a bioethanol factory in Csabacsűd in H2 2007.

With an approximately Ft 20 billion investment, bioenergetic company Mabio will build a bioethanol factory in Csabacsűd, Békés County. The construction will start in H2 2007.  The factory will process maize grown on a 55,000 hectare land every year. Mabio plans to produce a total of 600 million liters of biofuel by 2010. The company has already signed contracts with agricultural suppliers for the corn feedstock. Mabio has spent about Ft 1 billion on purchasing land for the production units, and counts on annual revenue of €75 million per factory as of 2008, based on current international prices of bioethanol. If the revenue target is met, the firm aims to recover its investments within about eight years. Mabio intends to finance the investment from bank loans and own resources, and is also looking to win state subsidies.Mabio said it expects to generate additional revenue from selling byproducts of bioethanol production. Each factory will yield an estimated 90,000 tons of byproducts a year.

Modine Builds a Greenfield Manufacturing Facility in Hungary to Support Growing Product Demand - Marks Modine's Second Facility in Hungary

Modine Manufacturing Company (NYSE: MOD), a global leader in designing and developing heating and cooling solutions for a diversified group of markets, announced today that its Board of Directors has approved a $12.0 million investment to build a second facility in Hungary, supporting growing demand for aluminum heat transfer products from global customers such as Caterpillar, Volvo, Nacco and AGCO in Europe, and extending Modine's global low cost country manufacturing footprint. In commenting on the announcement, David B. Rayburn, Modine's President and Chief Executive Officer, said, "This investment furthers our journey to reposition our manufacturing footprint to better balance our capacity in support of our blended manufacturing strategy. This move, as well as our previous announcements to build facilities in China, India and Mexico, is a key component of our five point plan to grow the company and increase profitability." Rayburn continued, "We are very excited to be building a second facility in North East Hungary, leveraging our manufacturing scale and creating multiple synergies to drive incremental business wins by giving us a more competitive cost position. While the prime driver for this new facility is the need to add aluminum brazing capacity in Europe, the plant is being constructed to provide us with the flexibility for further growth at the location as demand grows. This will enable us to continue serving the growing needs of the commercial vehicle, construction and agricultural machinery and automotive markets cost competitively."

The new facility will be built in Füzesabony, Hungary, very close to Modine's existing facility in Mezökövesd, Hungary. The 83,000 square foot state-of-the-art facility site was chosen to leverage operating synergies with Modine's Mezökövesd site, for Hungary's relatively stable political environment, superior area logistics and infrastructure, relatively favorable wage levels, and government-supported tax incentives. The facility is expected to start operations in early fiscal 2008.

Strabag SE, an Austrian construction company with operations in Central and Eastern Europe, picked Hungary to build its first cement factory, business daily Napi Gazdaság reported.

Strabag will build the Ft 33 billion plant near Királyegyháza in south Hungary, József Kővári, the managing director of Nostra Cement Kft, which will build and operate the factory, told the paper. Construction will probably start in September and the plant will begin operating at the end of 2009. It will reach its full capacity of 850,000 tons in early 2010. Strabag's factory will employ 100 people.

Korean electronics giant Samsung plans to spend Ft 20 billion to expand capacity at its plant in Hungary in the next year and a half

Samsung started work on a new 18,000-square-meter unit at its plant in Jászfényszaru, east of Budapest, the company said. The new investment is expected to open in mid-2007 and start operating at full capacity from 2010, creating 1,000 jobs. Samsung set up the Jászfényszaru plant in 1989 and has spent some $61 million on it in the past 14 years. It currently employs 2,000 people at the plant, where it produced 3.2 million TV sets last year and exported the products to 34 countries. Minister of Economy and Transport János Kóka said Samsung had made continuous and exemplary investments at its Hungarian unit since setting up in the country.