Siemens Celebrates 135 Years in Hungary: Next stop, the Industrial Metaverse

Interview

Tamás Jeránek

Tamás Jeránek, CEO and president of Siemens Zrt., talks with the Budapest Business Journal about the German multinational’s 135th anniversary in Hungary and what it has on the agenda for the coming decades.

BBJ: We were pretty proud when we reached our 30th anniversary on November 9. The same month, on November 22, Siemens celebrated 135 years in Hungary. Congratulations. To what do you put down such longevity?

Tamás Jeránek: First of all, congratulations on your 30th anniversary. Throughout the years, the BBJ has developed a great brand and is an example of quality journalism. Regarding longevity, our success may lie in continuous adaptation to the business world, which is a result of a push-pull effect. On the one hand, we are challenged by the future demands of our customers and the kind of solutions they will need. We also move forward with technologies we anticipate will contribute to a better tomorrow and bring answers to megatrends. Siemens is a master in changing itself: the company started 175 years ago with 10 people in a courtyard in Berlin to develop and market the dynamo. Today, it has become a global technology company with more than 300,000 people focused on industry, infrastructure, mobility, and healthcare. Our solutions enable organizations to achieve and accelerate their digital transformation and make their operations more sustainable.

In Hungary, Siemens was registered on November 22, 1887; six days later, Budapest’s first tram was in public use. Since our foundation, we have been contributing to the modernization of the country: the first subway in continental Europe, Hungary’s first radio station, the first telecommunication cable between Vienna and Budapest, and the first telegraph between Berlin and Budapest were all created with Siemens technology, just to name a few examples.

As a pioneer of modernization in Hungary, Siemens Zrt. has undertaken projects throughout its history that are perhaps less spectacular, but at least as significant. These include

• Introducing Industry 3.0 and 4.0 technologies;

• Supporting the creation of automotive factories that have become a mainstay of the domestic economy, and also the production process of these factories;

• Implementing industrial computers (PLCs) that enable efficiency and measurement, from power plants to water production;

• Creating efficient warehouses;

• Building automation and security systems for plants and office buildings;

• Creating smart infrastructure, achieving grid upgrades, sustainability, energy efficiency improvements; and

• Developing university cooperation enabling a more modern educational environment.

BBJ: Siemens may be “old,” but it is not old-fashioned. How do you work to keep the innovative mindset at play?

TJ: Innovation is in our DNA. In the fiscal year 2021, Siemens filed around 2,500 patents worldwide, 1,720 of them with the European Patent Office. The company’s employees reported 4,483 innovations, representing about 20 inventions per working day, making it one of the most innovative companies in Europe. Last year, our technology company spent 7.8% of its revenue on R&D, employing around 42,000 people and holding a comparable number of patents, at 43,400. In Hungary, we also pay particular attention to employee ideas and annually reward the initiatives with the greatest impact. In this area, our Kecskemét team is particularly strong, improving various aspects of maintenance work, but we also see a good number of efficiency ideas in sustainability. All are evaluated and implemented when possible. Innovation does not only happen from within, but also through co-creation with our partners, customers and academic institutions. This is one of the reasons why we have also developed close partnerships with universities. At the same time, our job to connect the online and real worlds demands nothing less than continuous innovation and reinvention.

BBJ: Say the brand name “Siemens,” and many people automatically think of Germany. How important is the Hungarian business to the overall operation? Is there anything you do here that is unique within the firm?

TJ: In the world of Siemens, Hungary stands out in several respects: Hungary (and the Central and Eastern European region) is a hotspot for automotive manufacturing, a key industry for Siemens: apart from Germany and China, for example, Hungary is the only location where all the most important representatives of German automotive manufacturing are present. Our training center is among the top 20 units worldwide.

BBJ: What is Siemens Hungary working on currently?

TJ: The fulfillment of the promise of industrial digitalization. In other words, Industry 4.0, the creation of smart infrastructures (smart grids), the development of e-mobility infrastructure, and providing building technology solutions are the key focus areas for Siemens Zrt. With little exaggeration, Siemens solutions are a part of almost every new greenfield investment project. Among the priority projects of our recently closed business year was the delivery of the charging solution for the largest e-bus fleet in Hungary, the building automation solution system for the tallest office building in the capital, and the modernization of the production facilities of a baking company and a bowling factory. We also extended our contract with a car manufacturer, where we will continue to provide on-site services for the coming years.

BBJ: Are there any plans for expansion in Hungary in 2023 or beyond about which you can talk?

TJ: In the 2022 financial year, we have further improved our performance after an already strong 2021, despite circumstances like COVID and supply chain challenges: last year, orders grew by 28% and sales by 15%. We aim to maintain the results and the momentum. This is based on the continued digitalization of the economy, the increasing sustainability ambitions of economic actors, and new investments. Another area of growth could be to open toward battery manufacturers.

BBJ: Where are your facilities in Hungary?

TJ: We have three locations in Hungary: Győr, Kecskemét and Budapest. In total, we employ 300 people, mainly in an office environment. Where possible, we introduced the “new normal” system, which allows working from home two-to-three days a week.

BBJ: How badly affected are you by the energy crisis or the war in Ukraine?

TJ: Implementing energy efficiency projects in the context of the energy crisis is at the top of our clients’ agenda. We support them in how they can achieve maybe even more with fewer resources. At the same time, Siemens has a long history of sustainability-related developments going back decades, and we build on this foundation to serve our customers. Siemens is helping the victims of the war in Ukraine through charity campaigns, both in Hungary and globally. Following the start of the war, Siemens announced its exit from the Russian market.

BBJ: Finally, how did you celebrate the 135th anniversary?

TJ: In addition to celebrating, anniversaries for me are always a reminder of how we can continue to serve modernization, especially in industry and smart infrastructures: what is the next step? In industry, this is the implementation of the metaverse. We are proud that Siemens’ first industrial metaverse will be created for the BMW plant currently under construction in Debrecen. With the industrial metaverse concept, we combine technologies such as digital twins, AI, simulation, and big data to perfect every aspect of manufacturing, as every detail and process interaction is reproduced in the digital space. For example, in the case of lower production, we can go back to the past to see what happened at the device/robot level on the floor, but we can also “look into the future,” testing the characteristics and results of the processes. This will be the next stage of Industry 4.0.

This article was first published in the Budapest Business Journal print issue of December 16, 2022.

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