1. dia

1
HUNGARY An ideal location for R D
Mrs. Ágnes Henter Head of Department Investment
Promotion Directorate ITD Hungary
2
Hungary in Europe
Hungary
Land 93,030 km² Population 10,1 mn people
GDP/capita at PPP (2006 estimate) USD
18.210
3
Hungary is Front-Runner as regards FDI Influx
Cumulated FDI in Hungary
82,151 million USD
Including reinvested earnings from 1995
Sources National Bank of Hungary
4
FDI stock by country of origin and industry
Total FDI Stock in Hungary as at end of 2006
81,718 million USD
Source National Bank of Hungary
5
Aviation Industry in Hungary
6
5 arguments that make Hungary an ideal location
for aircraft manufacturing
Aviation Industry in Hungary

• Automotive (engine manufacturing see Audi, GM
  Powertrain, Autokut) industry is one of the
  leading-edge sectors of the country Good basis
  of automotive suppliers who could diversify to
  aerospace
• Availability of talented, creative, flexible and
  qualified labor pool, combined with the highest
  productivity in CEE 5 educational Institutions
  specialized in aviation
• Aerospace industry is a start-up industry in
  Hungary. Major investors are large international
  companies (spare part production or MRO) GE,
  Lufthansa, Alcoa
• Outstanding business infrastructure Aerospace
  companies can settle in industrial parks located
  at existing airports
• Competitive incentive package innovative
  industries such as aviation are key priorities of
  the government

7
Aviation Industry in Hungary
Companies in the re-emerging Hungarian Aviation
Industry
Aeroplex, Budapest
Owner MALÉV Overhaul activity Airport location (Ferihegy) Established in 1992 as JV with Lockheed 620 employees New hangar in 2007 Turnover HUF 12 bn FAA/JAA/EASA certified

GEES, Veresegyház Lufthansa Techn., Budapest Elektrometal Paks, Paks
Repair activity 15M middle size investm. SME/Supplier category Not airport dependent Established in 2000 Employs 150 people Engine component repair FAA/JAA certified Overhaul activity 15-18M middle size investm. Integrator category Airport location Established in 2001 as a JV Employs 350 people Large aircraft overhaul JAR-145 certified Component manufacture Small size investment lt10m SME/Supplier category Not airport dependent Established in 2001 Employs 150 people Wire harness manufacture ISO 9100 certified
Hungaerotech, Debrecen Alcoa, Nemesvámos, Székesf.vár Flame Spray, Gödöllo
Owner Eldim Component manufacture Small investment lt10M SME/Supplier category Not airport dependent Established in 2002 Employs 30 people Turbine parts manufacture AS 9100 certified Component manufacture Middle size investment SME/Supplier category Not airport dependent Established in 1997/2002 Employs 110 people Aerospace fastener manufact. AS 9100 certified Thermal spray (APS, HVOF), slurry diffusion, honeycomb brazing SME / Supplier category Not airport dependent Established in 2002 Employs 30 people ISO 9000 certified
8
5 Educational Institutions specialized in Aviation
Aviation Industry in Hungary

• Budapest University of Technical and Economics
  Sciences with 24,383 students in general
• Department of Aircrafts and Ships provides high
  level education
• The University together with Hungarian Aviation
  Industry Foundation and corporations pursue
  international and domestic research activities
• Pilot and aircraft engineer training in College
  of Nyíregyháza
• College of Szolnok provides aircraft engineer
  education, the institute is now involved in the
  Grippen program
• A total of 300 students study aviation sciences
  in higher education
• 42 year vocational secondary education in
  Kossuth Lajos Vocational School in Budapest with
  yearly 60 students
• Additionally numerous technical educational
  institutes serve the industry by providing
  skilled workforce for the 2nd N-Tier Suppliers

9
R D sector in Hungary
10
Budgets of the EU framework programmes
50.5
19.2
14.96
13.22
6.6
5.39
3.75
Source HUNGARIAN SCIENCE AND TECHNOLOGY FUNDATION
11
Hungary attracts 15 of all new RD jobs in
Europe!
Hungarian RD activity in Europe
Destination countries by estimated job creation
in RD projects, H1-2006
Source IBM Plant Location
12
Employment in high-tech manufacturing and KIS
sectors as a percentage of total employment
Hungary-best performer in CEE
Hungary
EU-15
EU-25
Source Eurostat, High-tech Statistics 2007
13
Increasing RD expenditure

• 780 m RD expenditure in 2005, 14.4 increase
  compared to 2004
• RD expenditure 50 state funding, 40
  entreprises
• Hungarian RD represents 23,000 FTE jobs, of
  which 70 of scientists and engineers
• 2,500 RD units, of which 750 business units
• Reference science parks Infopark, Gaphisoft
  Park, Talentis Park, Corvin Science Park,
  Biopolisz in Szeged, Airport Debrecen
  Business Park
• 47,000 students in engineering, 19,000 students
  in IT
• Chemical engineering, mechanical engineering and
  informatics subsectors
• account together for 40 of the total RD
  expenditure in 2005
• Clinical medicines, health sciences and
  pharmacology account for 6 of
• the total RD expenditure

Source EY EIM, 2006
14
Attractive RD in Hungary
Automotive
Electronics
Life science

• Audi
• Continental Teves
• Denso
• Draxlmaier
• EDAG
• General Motors
• Knorr Bremse
• Magna Steyr
• Michelin
• Remy Automotive
• Temic-Telefunken
• ThyssenKrupp
• Valeo Auto-Electric
• Visteon
• W.E.T.
• Zeuna Stärker
• ZF Hungária

• Astra-Zeneca
• GE Medicor
• Novartis-Sandoz
• Sanofi-Aventis (Chinoin)
• Servier (Egis)
• Teva-Biogal

• Elcoteq
• Electrolux
• GE Medical
• GE Lighting
• Philips
• Samsung
• Solectron

ICT
Machinery

• Cisco
• Ericsson
• IBM
• Nokia
• SAP
• Siemens/Sysdata
• TATA-Consulting
• T-Systems

• AFT
• Bosch Power Tool
• Zenon

15
Corporate Research Centres
Increasing RD expenditure
Bosch Power Tool
Teva-Biogal
Audi Magna Steyr EDAG
General Electric
Michelin
ZF Hungária
W.E.T.
Zenon
Teva-Biogal
Samsung SDI
Draixlmaier
GM-Opel
Electrolux
Denso Visteon
Ericsson,Temic-Telefunken IBM, Simens PSE,GE
Lighting, GE Health-care Nokia, Cisco, SAP TATA
Consulting, T-Systems Sanofi-Aventis, Servier,
Astra-Zeneca Knorr-Bremse, Arvin Meritor (Zeuna
Starker)
Flextronics
Knorr-Bremse
Continental Teves Valeo Auto-Electric
Elcoteq
16
Strong co-operation between industry and academia

• Infopark, Budapest
• Budapest University of Technology and Economics,
  ELTE University of Natural Sciences, IBM, Hewlett
  Packard, Panasonic
• Innovation and Knowledge Centre, Budapest
• Budapest University of Technology and Economics,
  and 9 important IT companies
• Digital Community Centre, Miskolc
• Miskolc University, Hewlett Packard
• Research and Training Program, Szeged
• Szeged University, Tata Consultancy
• eScience Knowledge Centre, Budapest
• ELTE University of Natural Sciences, Delta
  Eletronik, Econet, ESRI, MiltuRáció
• Oracle Competency Center, Budapest
• Budapest Technical College
• CISCO Networking Academy Program, Budapest
• Budapest Technical College, Universiy of Szeged,
  Pécs, Veszprém
• SAP Competency Centre
• Budapest Technical College
• SUN Java and Solaris Certificates

17
Business, service and technology centre
Case Study - MorganStanley
Fixed income division

• Established in 2005
• Budapest
• Financial, Mathematical Modelling Centre
• Number of employees 25 top PhD mathematicians
• Established in 2006
• Budapest
• Provide support for the US and UK units of the
  investment bank, especially in the areas of
  mortgage finance, information technology and
  financial control
• Number of employees 450 people by 2009
• The choice of Hungary was due to positive
  experiences with the quality of its labor force
  and the country's political and economic
  stability
• President of Morgan Stanley International
  Jonathan Chenevix-Trench and head of Morgan
  Stanley Global Operations and Technology Eileen
  Murray

18
Audi FDI Brings High Technology to Hungary

• History
• Engine plant officially opened in 1994 to
  produce 1.8L engines.
• Received ISO 9002 certificate in 1995
• 4.2 and 3.7L 8 cylinder engine production began
  in 1997
• Beginning of Audi TT Coupé and Roadster Assembly
  in 1998
• In 2001 an Engine Development Center was set up
  now employing 100 people (40 engineers) A
  total of EUR 33,480 million was invested in this
  project.
• 5 millionth engine in November, 2001
• Since 2002 FSi (direct injenction petrol engine)
• Facts and plans
• In 2006 1.89 million engines
• 23,675 cars have been assembled, new TT model
  was introduced in 2006 (50,000 in 2007) and
  engine for the Q7
• Turnover in 2006 over EUR 5 billion
• Hungarys largest exporter today
• Employs 5,022 people
• 24 different engines in 379 variants of four-,
  six- and eight-cylindeer engines for the VW
  concern in a 375 th. sq meter area
• Since 2003 Audi invested a total EUR 3 billion
  in Hungary (360 million in 2006)
• In 2005 Audi Hungary was awarded for its RD
  activities by the Prime Minister

Source Audi
19
Audi Testimonial
We consider it our duty to support the
development of Hungarian universities with our
knowledge and experience. We also closely
cooperate with university students and professors
in the field of research and development,. Thom
as Faustmann, Managing Director, Audi Motor
Hungaria Ltd.
20
Services of ITD Hungary
21
Hungarian Government's Investment and Trade
Development Agency
ITDH Your Password to Hungary
Eger
Debrecen
Gyor
Budapest

• Non-profit organization
• Information and consultation centre
• for foreign investors in Hungary, providing
• General and comprehensive information about
  the Hungarian economy
• Tailor-made site proposals
• Detailed programs

Veszprém
Szeged
Pécs
Network
Central Office in Budapest 6 Regional Offices 56
Foreign Trade Offices 8 Representative Offices in
the border regions of neighbouring countries
22
First-class support by ITD Hungary

• Detailed tailor-made information package about
  economy, politics, financial incentives, business
  environment, tax system, sectors incl.
  electronics, etc
• Site visits, meeting with local, regional and
  government bodies, experts, service providers,
  consultants, potential suppliers, etc.

Decision

• Accelerating permitting procedures, evaluation of
  potential investments.
• Assistance in incentive application
• VIP treatment for expatriates (visa, working
  permits etc.)
• Press conferences, ground-breaking ceremonies

Implementation

• Special follow-up contact services
• Assistance in further investments, expansions.

After-Care
23
Thank you for your attention!
Mrs. Ágnes Henter Head of Department Investment
Promotion Directorate ITD Hungary
Hungarian Investment and Trade Development Agency
(ITDH) H-1061 Budapest, 12 Andrassy ut,
Hungary Phone [phone], Fax (36 1)
472-8180 E-mail investment_at_itd.hu Internet
www.itd.hu