Investor Ecosystem Honored in Annual HIPA Awards

2021 was a record-breaking year in terms of investment volume for HIPA-guided projects. Total investment volume reached a new high of nearly EUR 5.9 billion, and the largest single FDI greenfield investment to date was also made by South Korea’s SK On, worth EUR 1.9 bln.

The all-time high investment volume came from 422 projects that created 14,000 new jobs. Of those, 96 large projects accounted for investments of up to EUR 5.3 bln, more than half of which are linked to South Korea alone. Asian investors overall were responsible for roughly 60% of FDI. In total, eight deals worth more than EUR 100 million were closed.

Most projects were brought to Hungary by Germany, which was involved in 24 deals, with the United States second with 11. Korean companies excelled not only in this regard, finishing third with nine projects but also topped the job creation category with some 3,500 new jobs. German and American investors were the other top employment creators last year.

Electronics Top

A sectoral breakdown shows that electronics, including battery manufacturing, topped the charts: it represented over half (51.9%) of the investment volume. The second and third most foreign capital volume was directed towards automotive (12.5%) and food (11.1%), respectively.

Moreover, agreements were made with 19 companies in high value-added service activities, including business services, infocommunication, and R&D, which promises well-paid jobs for skilled labor on a mass scale, HIPA says. Also noteworthy was that investments were spread across a balanced geographic distribution: at least two new large projects were brought to every county, bar one.

Successful investments require an appropriate site and a strong supplier network; in recognition of this, the “Industrial Park of the Year” and “Supplier of the Year” awards honored the best performing stakeholders in each category.

Winners of the 2021 HIPA Investors of the Year Awards

Largest Greenfield Investment of the Year

SK On Hungary

One of the world’s leading battery manufacturers, Korea’s SK On, has launched the most significant single greenfield FDI project to date in Hungary. The EUR 1.9 billion investment in Iváncsa (51 km south of Budapest by road) will be its third site in the country, in addition to their two other factories in Komárom (91 km northwest). The new production base will have an annual capacity of 30 GWh and create 2,500 new jobs. The project enables the manufacturing of 430,000 e-cars per year. The facility of 80 hectares will also allow the automotive battery production capacities of SK On to be multiplied, further strengthening Hungary’s role in e-mobility.

Business Expansion of the Year

Becton Dickinson Hungary

Thanks to a EUR 188 million investment by American multinational Becton Dickinson, one of the world’s leading medical technology companies, the production of prefilled glass syringes can be doubled at its factory in Tatabánya (60 km east of the capital). The project, which will create more than 300 new jobs, will result in three new production lines, expected to be operational by the end of 2024. With a presence in 190 countries, BD opened its prefilled glass syringe manufacturing plant in Hungary in 2009 and has been continuously developing ever since. Having a history of 125 years, the U.S. company will invest USD 1.2 bln globally in the coming years to improve and expand its manufacturing technology; the Tatabánya project represents nearly one-fifth of that development program.

Business Services Center Investment of the Year

EY Global Delivery Services Hungary

London-based EY is a Big Four company, one of the leading auditing and business consulting firms globally, with more than 700 offices in 150 countries worldwide, among them Hungary. EY Global Delivery Services is establishing a new global service center in the Hungarian capital, focusing on tax consultancy-related services. The Budapest GDS center will primarily support EY companies operating in Europe, the Middle East and Africa. By the end of 2024, the company is planning to hire 500 employees for the new facility, in connection with which it will implement a training program worth more than EUR 2 mln.

R&D Investment of the Year

Ericsson Magyarország

Having been operating in Hungary for more than 30 years, Sweden’s Ericsson set up its first research and development division here in 1991. Ericsson Hungary announced its latest R&D project, worth close to EUR 8.4 mln, in 2021, thanks to which the next generation of cloud-based Internet Protocol Multimedia Core Network Subsystems (IMS) will be developed in Budapest. IMS controls and facilitates modern voice, video and conference calls and messaging in IP-based packet-switched communications networks. The investment will be realized by September of this year and will create 200 jobs requiring a higher education diploma.

Industrial Park of the Year

Debrecen, Southern Economic Zone

In the spotlight of rising FDI interest, Hungary’s second city Debrecen (222 km east of Budapest) invites investors to settle in four industrial parks on 1,400 hectares, the biggest of which is the 710-hectare Southern Economic Zone. The companies that have set up shop in the industrial park located in the Southern part of Debrecen since 2016 have announced foreign direct investments worth nearly EUR 1.3 bln, creating some 3,200 jobs. Among the top results in 2021 is the groundbreaking of SemCorp Group’s first separator foil plant outside of China, worth EUR 183 million, and the announcement by Vitesco Technology of a EUR 120 mln expansion. Based on all these developments, Debrecen made the Top 10 global cities with the best investment promotion potential in 2021 in a ranking run by fDi Intelligence, a division of the Financial Times.

Supplier of the Year

Cascade Engineering Europe

Cascade Engineering Europe, a company with American ownership but under Hungarian management, operates in Halásztelek (just 20.5 km south of central Budapest) and carries out molding activities, primarily for the automotive sector. With a staff of 400, Cascade products are used in the vehicles of every OEM, with Volkswagen-Audi Group, BMW and Daimler being among the primary customers. The company was even able to grow during the pandemic, not least because it managed to align its profile to the needs of electromobility, manufacturing heating and cooling battery line components, as well as unique plastic components for battery modules.

This article was first published in the Budapest Business Journal print issue of April 8, 2022.