Alpha News
A selection of news and PR featuring Alpha clients
Small Companies Bring Large Amounts of FDI
( 16 / October / 2004 )
Saturday, October 16, 2004 Source: HVG - English - Selected News “Perhaps due to the similar historical past or Hungarians’ good sense of humor, when we first arrived in Hungary, I immediately felt myself home,” said Eamonn Tynan, founder of Ireland-based kitchen furniture producer Springhill. The small firm with 50 employees made its first foreign investment in Hungary.
After the success of its first enterprise, Vienna-based M. Frey Wille HmbH has recently opened its second shop at Ferihegy airport. The company sells custom-made jewels and makes HUF 80 million–HUF 90 million in revenues a year.Small foreign companies tend to choose Hungary as a place for their investment because of the new market, qualified and relatively cheap manpower. They contribute to 95%–98% of 30,000 foreign companies operating in Hungary. Austrian businessmen alone have established 140 new enterprises so far this year, according to figures from the Austrian Embassy. In Q1 2004, small foreign enterprises brought almost half as much foreign capital to Hungary as large multinational coompanies did. It is important to attract these businesses as Hungary cannot expect more investments by multinational companies these days, experts say.
"Multinational companies aiming to set their foot in Hungary already appeared here in the ’90s,” said Péter Spányik, CEO of ITDH Kht., the government’s investment and trade promotion agency.
"Acquisition targets for large companies are now in short supply in Hungary, and most foreign enterprises do not want to buy companies with revenues below 10 million,” said Miklós Varga, a manager at advisory firm PricewaterhouseCoopers. Of Hungary’s 5,000 medium-sized companies, only 50 reach this size limit, according to figures from research company Ecostat.