Contents for Econews No.182 (22 September, 1999)
Canadian car part plant for western Hungary
Raba expecting H2 sales improvement
Interdepartmental logistics committee to be set up
Hungarian banks put off issuing chip cards
Hunagrians to spend less on perishables, more on
leisure
Jarai: 2000 budget deficit 3.5pc of GDP
Energy consumption up 1.2pc in the first eight months
Budapest, September 22, 1999 (MTI-ECONEWS) - The
Canadian car parts manufacturer Linamar Corp along with
Canadian exhaust pipe manufacturer Westcast Industries Inc
will build a foundry and a machine factory in West Hungary
through investment of USD 87.9m, the economic daily Napi
Gazdasag reported, quoting the news agency Bloomberg.
The two Canadian companies hold 50pc each in the
company, which will manufacture and distribute the
automotive parts in Europe.
Linamar is the majority owner of the
Oroshaza-based (SE Hungary) Mezogep Rt.
Budapest, September 22, 1999 (MTI-ECONEWS) - Even if
Raba does not reach last year's level in terms of net sales
revenue this year, the difference will be much less at the
end of the year than it was at the end of the first six
months, CEO Barnabas Zalan said at a press conference in
Gyor on Tuesday.
Raba had consolidated net sales revenue of HUF 54.5bn in
1998 and HUF 22.873bn in the first half of 1999, a 21.3pc
drop in forint terms on the same period of last year. The
decline in sales volume was increased by the fact that
52.6pc of sales in 1998 H1 and 55.8pc of sales in 1999 H1
came from exports.
Ildiko Hargitai, managing director of Raba Vehicle Kft,
operating as an independent company since June 1, said bus
manufacturing, started earlier this year, will generate a
modest profit in 1999 despite initial difficulties. Raba has
orders for 75 buses for this year. For the moment, Raba is
manufacturing suburban and city solo and 18-m articulated
buses on the basis of the licence of the Belgian firm
Jonckheere, using Raba components and a growing share of
products made in Hungary. The price of the solo buses is
between HUF 28-32m and that of the articulated buses, making
up 35pc of this year's orders, is between HUF 37-45m.
Raba's vehicle division had net sales revenue of HUF
3.6bn in 1998, not including bus manufacturing.
The plant has the capacity to produce 100 buses a year
in one shift and is planning to start manufacturing
low-floor buses next year. By launching production in a
second and a third shift, production capacity could be
increased to as many as 300 buses a year. Ms Hargitai said
Raba does not intend to produce more than this in Gyor,
instead, they are planning to set up assembly plants abroad,
primarily in Iran or in Southern or Eastern Europe, as the
Belgian company does not allow deliveries to Western Europe.
The gear division, to become an independent company as
of January 1, 2000, is expected to release 7,000-9,000 sqm
of production area of its production hall of 67,000 sqm as a
result of a project started on April 1 and carried out by
World Class International to boost efficiency. As a result
of the restructuring project currently underway, production
capacity could increase 38pc and processing time could be
cut by 55pc and semi-finished stocks could decrease by 68pc.
As part of the project, Raba will also rationalise its
system of supplies, and is planning to dramatically reduce
the number of suppliers from the current 900.
The comprehensive area rationalisation underway at
Raba's Gyor sites is expected to release a total of 300,000
sqm, and the restructuring underway at the production plants
is expected to make a further 90,000 sqm available. Raba
intends to sell the released area as part of the
developments projected in the city of Gyor. It will cost HUF
1.7bn to empty the area, which could return in three years,
however, the market value of the 20,000 sqm area released
first exceeds the costs of its release by eight times.
Budapest, September 22, 1999 (MTI-ECONEWS) - An
interdepartmental committee will be set up in a few days to
promote and develop logistical thinking, Minister of
Economic Affairs Attila Chikan said at a conference in
Budapest on Wednesday.
Mr Chikan said the Ministry of Economic Affairs will
merge the programmes relating to logistics centres and the
network of industrial parks from 2000, eliminating redundant
activities.
The minister said that, instead of increasing the number
of industrial parks from the current 71, efforts should be
focused on developing the existing ones. This, however, does
not mean that the system of inviting tenders to award the
status of industrial parks and to support infrastructural
developments at the parks will be eliminated.
There are 10-15 Hungarian-owned large companies which
could soon encompass the Eastern European region through
their activity and could act as a bridge connecting
multinational companies and Hungarian small and medium-sized
entreprises, he said.
The government's supplier programme has proved
successful in contributing to the continuous increase of the
proportion of Hungarian small and medium-sized entreprises
within suppliers to multinational companies, Mr Chikan said.
Budapest, September 22, 1999 (MTI-ECONEWS) - The largest
number of VISA cards in Central Europe was issued in Hungary
by mid-1998, but Poland has taken the lead since, with a
total of 2.5m cards. At the same time, the number of cards
per capita is still highest in Hungary compared to other
countries in the region, VISA International's regional
director for Central-Europe, the Middle-East and Africa
(CEMEA) Radu Obreja said.
The number of cards issued in Hungary was up to 1.19m by
the end of June this year, representing a 35pc increase in
one year. The third highest number of VISA cards in the
region was issued in the Czech Republic, at 900,000 cards at
the end of June this year, representing a 68pc increase in
one year.
Hungary remained first regarding the number of cards
issued per capita. There are 110 VISA cards per 1,000
people, which is higher than the average in Austria, the
Netherlands and Germany. The use of cards expanded more
slowly than usual in these countries, because cheques are
used frequently.
Purchases made by holders of VISA cards was more than
USD 1.7bn in the 12 months up to the end of June,
representing a 69pc increase from one year earlier. At the
same time, the increase was 260pc in Poland and 151pc in the
Czech Republic. VISA cards are primarily used for
withdrawing cash in Hungary. A total of USD 150m was spent
with VISA cards over 12 months before the end of June this
year, representing an average of USD 15 per citizen. There
are more than 200 ATMs per 1 million citizens in Hungary.
There were more than 2,180 ATMs in August 1999, 17,000
retail outlets accepted payment by VISA card and there were
15,000 POS terminals.
By 2001, all VISA cards need to be converted to chip
cards from the current system, in which information is
stored in a magnetic strip, VISA manager Rob Clark said.
Chip cards are much safer and they are multi-function,
because they can store a lager amount of information. The
first chip cards were issued in Poland and Slovakia in
August, but Hungarian bankers are more cautious and want to
hear about the first experiences with such cards in the
region before issueing them.
Budapest, September 22, 1999 (MTI-ECONEWS) - Prices of
perishable goods could drop 5-10pc in the next few years in
Hungary due to increased competition from shops that sell at
a discount and work with low margins, Akos Kozak, director
of market research company GfK Hungaria said on Wednesday
after a two-day conference dubbed "Hungarian commerce after
2000".
The event was organised by GfK Hungaria and Dorel and
Partners.
Purchasing power in Hungary will further increase but
consumers will spend more on products related to leisure,
beauty care and sport, analysts predicted.
They expect hypermarkets' market share will double to
17pc within ten years, multinational department store chains
will expand in Hungary and new players will also enter the
market. Currently, sales by multinational companies generate
25-30pc of total retail trade and represent almost 50pc of
food retail sales.
Budapest, September 22, 1999 (MTI-ECONEWS) - There is a
good chance that the general government budget deficit will
not exceed the foreseen 4pc of GDP ceiling, and will drop
further to 3.5pc next year, Finance Minister Zsigmond Jarai
told the Budget and Finance Committee of Parliament on
Wednesday.
He said the government is sticking to its inflation
forecast of 6-7pc in 2000 and therefore it will allow any
price rises over 6pc within its jurisdiction only in
exceptional cases.
Mr Jarai pointed out that the government reckoned with
lower world crude prices than the current USD 24/brl.
He proposed that gas prices should be liberalised and an
adjustment mechanism should be applied to stop fluctuations
in the price of petrol. Decisions to these effects will
entail an amendment to the law regulating the price of gas
and an agreement with Mol Rt about petrol, Mr Jarai noted,
adding that Mol has approved the outlines of the plan.
Mr Jarai acknowledged the government had backed out from
major tax reforms as a result of widespread criticism of the
blueprint, but said the piecemeal strategy adopted by the
most recent proposal will work to the same effect of
transparency, simplicity, like taxation of capital gains and
wages, and more efficient collection.
The Finance Minister denied claims that local
governments will receive less money due to a government
decision to decrease to 5pc the share of personal income tax
payments transfered to local governments. He said in total
the central government will in fact give HUF 8.4bn more
support to local governments next year than this year.
Mr Jarai also denied Smallholders' claims about the
existence of HUF 300bn additional resources in the draft
budget which would be more than enough to fund a HUF 163bn
increase of the budget of the Smallholder-led Ministry of
Agriculture and Regional Development next year.
With regard to general government budget deficits next
year, Mr Jarai said he does not support plans to increase
the 3.5pc/GDP target next year.
Budapest, September 22, 1999 (MTI-ECONEWS) - Hungary's
energy consumption in the first eight months of this year
was 1.2pc higher than in the same period of last year, the
Energy Information Office announced on Wednesday.
The preliminary figures show that energy consumption
totalled 660 petajoules in the first eight months, or the
equivalent of 15.8m tonnes of crude oil. Energy sources
available between Jan-Aug totalled 731.5 petajoules, down
2.1pc from the same period of 1998.
The average daily temperature in the first four months
of this year (5.19 degrees C) was 1.45 degrees lower than in
the corresponding period of last year.
Of total available energy sources, 41.6pc came from
domestic sources and 58.4pc was imported. Hydrocarbons
represented 71pc, down from 71.8pc last year. The proportion
of coal and coal derivatives in total energy sources was
13.8pc in the eight-month period, as against 13.7pc in the
same period of last year.
The nuclear power station in Paks generated 3.5pc more
electricity than in the same pediod of 1998 and provided
12.1pc of Hungary's total energy consumption in the first
eight months of this year.
Co-operate consumption within overall energy consumption
totalled 24.678GWh, up 1.5pc from Jan-Aug 1998.
Energy exports of Hungary totalled 50.5 petajoules in
the first eight months of 1999.
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