INTERNAL AFFAIRS 11.05.2004 - Irak: Fidesz would like a turnaround 12.05.2004 - ‘Patriots’ above Hungary?

- Three-fourth of Hungarian would call back soldiers from Iraq 13.05.2004 - Fuel excise tax to be cut 14.05.2004 - Euro from 2010 in Hungary - HUF 80 million redundancy pay for Károly Szász FOREIGN AFFAIRS 11.05.2004 - Austrian manufacturers on EU accession - Euptimism on the increase 13.05.2004 - European Commission initiates budgetary surveillance for Hungary MACROECONOMY 10.05.2004 - Péter Kiss on economic turnaround 12.05.2004 - Inflation under 7 percent - OECD calling for lower public expenditures 13.05.2004 - British investors having an eye on Hungary - Trade deficit lowered 14.05.2004 - Current account deficit larger than expected BANK 10.05.2004 - Decreasing deposit interests - Inter-Európa Bank achieved better figures 11.05.2004 - Trade credit market depression 13.05.2004 - More than one million MasterCards - Pannon GSM–T-Mobile: bank transaction by using mobile phones INSURANCE 11.05.2004 - New car insurance policies from Union and Autóklub 12.05.2004 - ING managed to preserve its market leader position 13.05.2004 - Lloyds insurance company to enter Hungarian market? HEAVY INDUSTRY 11.05.2004 - Mezõgép located in Szolnok not sold 12.05.2004 - DAM Steel again for sale 13.05.2004 - Suzuki faces general meeting CHEMICAL INDUSTRY 10.05.2004 - Richter: Plan-B only with prescription 14.05.2004 - Increasing profit at Egis - Pannonplast to close down its factory in Szombathely ENERGY INDUSTRY 11.05.2004 - According to Mol’s opinion gasoline prices will not rise above 300 forints 13.05.2004 - Démász 1Q brought no surprise - Honeywell system in Százhalombatta BUILDING INDUSTRY 10.05.2004 - Creaton builds factory in Lenti 12.05.2004 - Leier concrete tiles from Hajdúszoboszló ELECTRONICS 13.05.2004 - Samsung could move cellular phone production to Hungary TELECOMMUNICATION 12.05.2004 - UPC increased prices lawfully 13.05.2004 - Westel to change its image within a month 14.05.2004 - Telecommunication Constant Arbitration Court set up INFORMATION TECHNOLOGY 13.05.2004 - Improving Graphisoft results - Successful year-start at Synergon FOOD INDUSTRY 10.05.2004 - Kométa preparing to return 11.05.2004 - Fino-Tej builds production base 12.05.2004 - Cartel suspicion on baby food market 13.05.2004 - Bábolna to bid for Pick Szeged - Old cigarette boxes to stay till the end of the year 14.05.2004 - „Makói” garlic from China - Parmalat making losses AGRICULTURE 11.05.2004 - Agrarian prices on the increase 2

12.05.2004 - Degussa AG acquired Agroferm Rt. TRADE, FAIRS 10.05.2004 - Harsh competition on white goods market 11.05.2004 - Lidl stores to open up in weeks - Rent-a-car service provider company established under the name Pennycar 12.05.2004 - Test production of the new Suzuki starts in the autumn 13.05.2004 - Foreign suppliers in talks with multinational chains - Cars getting more expensive from Thursday 14.05.2004 - New shopping centres near Auchan stores TRAFFIC, TRANSPORT 10.05.2004 - Decreasing loss at Malév 14.05.2004 - Motor Road M5 free of charge until Gyál - Frontier crossing point on water under construction in Mohács - MÁV may lose its creditworthiness TOURISM, HOSPITALITY 10.05.2004 - Hotels are performing well 13.05.2004 - More tourists visited to Hungary SERVICES 11.05.2004 - Up-to-date company data via cellular phones 13.05.2004 - Hungarian Post fined HUF 10 million INVESTMENT, DEVELOPMENT 10.05.2004 - Motorway M7 to be built further - PannonPower to build water power plant - Development of several billions in Búza square in Pécs 11.05.2004 - Balaton Plaza to be handed over by the end of May - MKB Hungária heading abroad - Changing ownership structure at some Wallis subsidiaries 12.05.2004 - Concash moves production to Hungary - Electrolux: hoover factory in Jászberény will be expanded by additional production 13.05.2004 - British buying spree in Central Europe - Hungarian shopping centres in French hands 14.05.2004 - Demján going to Tököl - Flat prices significantly up in the first quarter SECURITIES’ MARKETS 10.05.2004 - Dividend disbursement before acquisition MUNICIPALITY 10.05.2004 - Residential park next to the bath in Marcali PUBLIC HEALTH 10.05.2004 - Foreigners among medicine buyers MEDIA 12.05.2004 - New commercial director at Viasat

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INTERNAL AFFAIRS - 11.05.2004 Irak: Fidesz would like a turnaround
Chairman of opposition Fidesz Hungarian Civic Alliance Viktor Orbán would like his party to revise its standpoint on the Iraqi mission, since there are unbearable things going on there both from the human point of view and morally. He added that the situation has gone out of control. The former prime minister announced on the session of the party’s parliamentary group that the world-wide fight against terrorism and Iraq already had not too much in common. The Iraqi question should be put under the management of the United Nations and Fidesz should make its viewpoint quite clear on the topic ‘ he stated, adding that in his opinion, an American-Hungarian summit was expected to exchange views. Orbán said that Fidesz would have an extraordinary meeting to discuss this topic. Leader of parliamentary group of Hungarian Democratic Forum MDF Károly Herényi suggested that he would take part in the Fidesz session and would detail his party’s ‘professionally founded’ standpoint on the Iraqi mission. Defence Minister Ferenc Juhász, however, stated that Hungary would not give up its role in Iraq if there were no changes in the situation there. Iraq could not be a topic of the campaign ‘ the minister added, saying that the government was deeply condemning what took place in prisons in Baghdad. Alliance of Free Democrats SZDSZ is taking steps for a statement in connection with Hungarian soldiers delegated to Iraq that would condemn the torture of hostages from Iraq ‘ Gábor Fodor from SZDSZ announced. He added that the torture was ‘scandalous and shameful’. (Nszab, p 3, NSZ, p 1 and 8, MH, p 1 and 2)

INTERNAL AFFAIRS - 12.05.2004 ‘Patriots’ above Hungary?
American-manufactured Patriot PAC-3 rockets or ‘ what seems to be less likely ‘ radar receptor radar stations can be set up in Hungary to catch eventual attacking rockets shot from countries belonging to the ‘Evil’s Axle’. American magazine Jane’s Defence Weekly writes in its latest edition that Washington is in talks with its allies and to some extent even with Russia on whether to establish antirocket systems on their area in an attempt to defend against rockets coming from Iran or North Korea. Daily Népszabadság also has information confirming the news. The daily writes that American experts are conducting talks on a quarterly basis with representatives of the Foreign Ministry and the Prime Minister’s Office on locating some elements of the system in Hungary. Talks are on expert level for the time being. (Nszab, p 1 and 2)

Three-fourth of Hungarian would call back soldiers from Iraq
According to the April survey of pollster Gallup Institute, 77 percent of Hungary’s population would be rather for calling back home soldiers delegated to Iraq, whilst only 15 percent would be against it. The survey was conducted before news of torturing Iraqi hostages came to the surface. 15 percent of those asked are of the opinion that ‘an international fight against terrorism is going on in Iraq’, whilst 44 percent state that „what is taking place in Iraq is rather the protection of the United States’ own interests.” (MH, p 3)

INTERNAL AFFAIRS - 13.05.2004 Fuel excise tax to be cut
Government spokesman Zoltán J. Gál announced after yesterday’s cabinet meeting that the government would like to reduce the excise tax content in the price of petrol to slow down the further price rise of petrol and diesel. The Parliament is likely to modify the law on excise tax already on Monday. Under the new version, should fuel prices significantly deviate from the level that was realistic when the budget was drafted, the government would have the power to reduce the excise tax for a limited time. The extent of this would equal the VAT income increase generated as a result of higher fuel prices, that is, petrol would not get cheaper, but rather the price increase could be moderated. Governing parties, together with Mayor of Budapest Gábor Demszky supported the initiative, however, opposition Fidesz Hungarian Civic Alliance is of the opinion that it will not solve the problem and the real remedy could be the 20 percent reduction of excise taxes suggested by them. Hungarian Democratic Forum MDF will decide on Monday whether to back the idea of the government or that of Fidesz. (MH, p 10, NG, p 1 and 4, VG, p 4)

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INTERNAL AFFAIRS - 14.05.2004 Euro from 2010 in Hungary
Hungary will introduce the euro on 1 January, 2010 - Finance Minister Tibor Draskovics announced after the extraordinary government session yesterday. Draskovics added that the government opted for a safe rather than a rapid introduction. According to a convergence program, priorities include reducing the size of the state and terminating excessive spending. Other elements of the program call for a health care and defence reform, modernisation of professional and adult training and organising tasks of small areas. Draskovics added that to meet the plan of euro in 2010, an agreement of social partners, expected for autumn, was necessary and to this end reconciliation work would start already in the summer. The middle-term macroeconomic plan counts - besides accelerating economic growth - on European Union founds to a large extent, the amount of which may reach HUF 1,500 billion in the next four years. According to Financial Ministry calculations, per capita GDP, counted on a purchasing power parity, will reach 60 percent of the level of 15 „older” European Union member states from the current 54 percent. The state is to save HUF 2,000 billion in the next four years with the general government deficit going down by EUR 800-1000 billion and tax income by HUF 1,000-1,200 billion. The amount of state redistribution will decrease by 4 percent. The Finance Minister stated that in a favourable situation, the country may meet the fiscal Maastricht criteria by 2007 and then economic policy leaders may decide to enter the eurozone already in 2009. Draskovics went on to say that the central bank governor also approves the idea of introducing the euro in Hungary in 2010. However, yesterday’s government session did not address when Hungary would enter the exchange rate mechanism ERM-II. (VG, p 1 and 4, NG; p 1 and 7)

HUF 80 million redundancy pay for Károly Szász
Outgoing President of Hungarian financial market watchdog PSZÁF Károly Szász will get a redundancy pay of HUF 80 million - daily Magyar Hírlap has learnt. Parliament is going to vote on his successor for the second time next Monday. Should István Farkas get the support, the new management of the supervisory authority may start working already in the middle of next week. At present, search is going on for one position in the new management. In the meantime, Barnabás Lenkovics, parliamentary ombudsman of citizen rights spoke about Szász in a negative tone. He stated that PSZÁF made a mistake when it did not term activities of Baumag and its partners’ an excessive collection of deposits or it has not taken steps on banning their activities. The ombudsman is of the opinion that it is not tight that while PSZÁF has reported the chairman of the co-operation to the police on charges of carrying out financial activities without appropriate licences, the company can work on undisturbed. (MH, p 1 and 9, NSZ, p 1 and 4, VG, p 19, NG, p 4)

FOREIGN AFFAIRS, EUROPEAN UNION - 11.05.2004 Austrian manufacturers on EU accession
According to a poll published recently, the majority of members of the Association of Austrian Manufacturers (IV) are of the opinion that the recent European Union accession of 10 new members would bring them more advantages than drawbacks. The survey represents 204 companies and more than 250.000 employees and reveals that 56 percent of those interviewed put easier border crossing on the first place, whilst 49 percent were expecting larger growth dynamic and 39 percent decreasing bureaucratic and other hardships as results of a larger Union. When it comes to disadvantages, 35 percent mentioned larger competition on foreign markets. 26 percent of Austrian companies consider the May 1 expansion of the Union a thing of large importance with 46 percent thinking that it is of middle importance and 30 percent of the opinion that it is not that important. (NSZ, p 10)

Euptimism on the increase
The prestige of European institutions has been on the increase, whilst that of Hungarian ones has been going down. These findings were revealed by Eurobarometer in a survey conducted this spring in 13 European Union member states. 44 percent of those interviewed were of the opinion that the European Parliament had a larger impact than national ones. As for Hungary, 13 percent of those asked trust parties, 29 percent the Parliament and 31 the government. Analysing the data, Foreign Minister László Kovács told daily Népszabadság that he was happy with increasing figures for European Union institutions, but was worried with declining trust for Hungarian ones. József Szájer, who is second on the European Parliament list of Fidesz Hungarian Civic Alliance is of the opinion that the European Parliament could be more popular because of its ‘low public nature and large distance’. (Nszab, p 1 and 6)
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FOREIGN AFFAIRS, EUROPEAN UNION - 13.05.2004 European Commission initiates budgetary surveillance for Hungary
The European Commission is to initiate formal budgetary surveillance against six new member states of the European Union (Cyprus, Poland, Hungary, the Czech Republic, Malta and Slovakia), since their general government deficit exceeded the limit of a GDP proportionate 3 percent prescribed in the stability pact. The Commission is to come up with suggestions for the above-mentioned member states on how to push down the deficit, but it gives a several-year moratorium for all of them to meet the requirement. The report on Hungary reveals that although the general government deficit went down to 5.9 percent of the GDP last year, it was still well over the limit value of the stability pact. The report adds that the ballooning deficit can not be put down to outstanding events beyond the government’s control or serious economic setbacks. The document writes that after two years of fast growth, internal state deficit of Hungary in proportion to its GDP also went near the 60 percent limit of the pact. (Nszab, p 17, VG, p 3)

MACROECONOMY - 10.05.2004 Péter Kiss on economic turnaround
A total of EUR 580 million working capital came to Hungary in the first two months of the year, significantly up on the corresponding figure of EUR 79 million posted a year earlier ‘ Chancellery Minister Péter Kiss announced. He added that a turnaround has started on the back of improvement-related changes coming from administrative cost cutting and measures aimed at bettering conditions of economic growth. (NSZ, 8 May, p 5)

MACROECONOMY - 12.05.2004 Inflation under 7 percent
Hungary’s consumer price inflation (CPI) rose to an annual 6.9 percent in April, the Central Statistics Office (KSH) reported on Tuesday. The month-on-month inflation rise was 0.3 percent in April, the KSH said. Analysts’ consensus was larger for both figures with the better than expected data being the result of a 12 percent drug price decrease and the end of price hikes for foodstuff products. Majority of price increases between January and April were stemming from VAT and excise tax changes. Without them, inflation in the first four months would have been only 4.7 percent. Market experts, taking into account figures published recently, are of the opinion that this year’s inflation will be flatter than expected and project that the peak, expected for early summer, will reach 7.1-7.5 percent instead of the earlier forecast of 8 percent. (NG, p 1 and 3, VG, p 4, Nszab, p 15)

OECD calling for lower public expenditures
Hungary has to cut back its public spending to curb its general government deficit and prevent it from exceeding the target figure of 3 percent of GDP, which would mean putting the target date to introduce the euro in danger ‘ OECD warns in its half-yearly report. The document terms financial balance goals ‘overoptimistic’ in the light of earlier performance and adds that there is a real danger that targets will not be met, should financial reforms do not regulate spending cuts. The report remarks that Hungary’s entrance to the European Monetary Union (EMU) is expected to be postponed till 2009 or 2010, since the general government deficit of 2003 reached 5.9 percent of GDP. The institution, made up of industrialised states, forecasts that Hungary’s GDP growth will reach 3.3 percent this year, growing to 3.8 percent in 2005 after last year’s corresponding figure of 2.9 percent. As for inflation, this year’s figure will be around 6.9 percent and is set to go down to 4.8 percent in 2005, which compares to 4.7 percent posted in 2003. Unemployment rate is projected at 5.9 percent this year, unchanged from 2003, whilst in 2005 it is to decrease to 5.7 percent according to OECD. (Nszab, p 15, NSZ, p 5)

MACROECONOMY - 13.05.2004 British investors having an eye on Hungary
According to British investors, Hungary could have an important regional role in Eastern-Western trading also after the country’s recent accession to the European Union - Great Britain’s ambassador to Hungary announced. John Nicols said that British investors take into account not only the Hungarian market, but also that of other Eastern European countries outside Union, mainly the Ukrainian and Romanian ones whilst drafting their investment plans. He added that Great Britain was the sixth largest investor in Hungary with total investments up to now totalling EUR 3.5 billion. (NSZ, p 4)

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Trade deficit lowered
Foreign trade balance closed with a deficit of 766.5 million euros in the first quarter of the year versus previous year’s figure of 906.3 million euros - announced KSH (Central Statistics Office). Exportation between January and February increased by 13.4 percent to 10.01 billion euros, while importation rose by 10.7 percent to 10.87 billion euros. Deficit of foreign trade balance added up to 353 million euros in March. (VG p4, NG p3)

MACROECONOMY - 14.05.2004 Current account deficit larger than expected
Hungary’s preliminary current account deficit was EUR 588 million in March and the January-March deficit came to EUR 1.756 billion, the National Bank of Hungary said on Thursday. (The market forecast was EUR 420 million for March.) Last March saw a current account deficit of EUR 376 million and the first quarter of 2003 an EUR 1.488 billion one. Analysts are of the opinion that March deficit is not that dramatic, however, they draw the attention to high import figures in terms of goods turnover and services. The balance of income showed a balanced picture this March. Net fund inflow amounted to EUR 198 million and reinvested income EUR 126 million. (NSZ, p 5, NG, p 1 and 3, VG; p 4)

BANK - 10.05.2004 Decreasing deposit interests
ÁÉB (General Banking and Trust Co.) terminated three-week fixation in case of deposits and launched a new, one-week fixation form. The bank reduced the interest of its promoted retail deposits by 0.45 percentage points. The interests of HVB Bank’s retail deposits decreased by 0.4 percent, thus the highest interest is 10.85 percent. Inter-Európa Bank reduced the interest of the semi-annual retail deposit by 0.5 percentage points. At K&H Bank (Commercial and Credit Bank) entrepreneurial deposit interests decreased by 0.25-0.76 percentage points. (MH May 8-9th p12)

Inter-Európa Bank achieved better figures
Inter-Európa Bank achieved a consolidated result after taxation of 676 million forints in the first quarter of the year. This exceeds previous year’s figure by 37.4 percent. The bank’s unconsolidated profit improved from 416 million to 501 million forints. (MH May 8-9, p12, MN May 8, p12)

BANK - 11.05.2004 Trade credit market depression
This spring could see as much lower than expected turnover in shops selling electronic appliances, thus trade credits were also selling much worse. Market leader Cetelem could meet its target figures thanks to its credit cards and banks could increase their turnover also thanks to plastic cards. Some credit institutions could grant credits in the first four months only to the tune of 80-85 percent of their figures from the corresponding period of last year. Credigen, still operating without credit cards, announced that April turnover translated into 67 percent of last April data. Experts argue that many were hoping for lower prices in the European Union and that is why they were waiting with purchasing. There are signs showing that prices would go down, however, the 8-10 percent downward trend could be the result of market boosting intentions. What is a fact that since prices went down, demand has been on the increase, so banks are expecting a strong May and an even better June, the latter one on the back of Football European Championships. (MH, p 1 and 9)

BANK - 13.05.2004 More than one million MasterCards
More than 80 thousand MasterCards issued by Hungarian banks in the first quarter of the year. As a result of this the number of payment media MasterCard and the plastic money with MasterCard Electronic logo increased by 37.1 percent to 1.06 million. The company’s clients carried out 5.4 million transactions in a value of 740 million dollars gross in the period between January and March. (NG p5, VG p15)

Pannon GSM–T-Mobile: bank transaction by using mobile phones
Pannon GSM and T-Mobile in co-operation established a bank independent mobile payment system. As a result of this development bank clients are able to settle their invoices issued by public utility companies joined to the system by using their mobile phones. (MH, p10)

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INSURANCE - 11.05.2004 New car insurance policies from Union and Autóklub
Insurance company Union Biztosító Rt., in co-operation with Magyar Autóklub („Club of Hungarian Cardrivers”), is coming up with two new products. The Klub Third Party Liability Insurance (Klub Kötelezõ Biztosítás) is offered for those motorists who have been driving for 3-12 years and would like to fix their cars in smaller service bases that are available irrespective of the brand of the car. Union is to pay compensation for these drivers in cash. Another novelty is the Klub passenger insurance that can be signed even for a day. Both new insurance policies can be taken out by drivers being members of Autóklub. Union is expecting to post a HUF 4 billion premium revenue from the vehicle segment, boasting a clientele of 75 thousand. (NG, p 5)

INSURANCE - 12.05.2004 ING managed to preserve its market leader position
ING Biztosító Rt. (ING Insurance Co.) achieved a profit of 4.1 billion forints, which exceeds last year’s figure by approximately 15 percent and a premium income of 62.8 billion forints. As a result of this the insurance company secured its market leader position. The old-age pension fund of the financial group the Netherlands’ has 420 members, the managed property added up to 130 billion forints. ING Befektetési és Vagyonkezelõ Rt. (ING Investor and Asset Manager Co.) manages properties in a value of 400 billion forints. The fourth member of the group dealing with real estate developments launched more major investments in Budapest not so long ago. (MH, p13)

INSURANCE - 13.05.2004 Lloyds insurance company to enter Hungarian market?
British monetary supervisor authority allowed Lloyds seated in London to pursue activity is eight new EU member countries. The London seated financial consortium has not contacted Hungarian financial supervising authority yet. Within the insurance market the British company offers solutions among others in such specific risk areas like catastrophes or flights. (VG 14. old.)

HEAVY INDUSTRY - 11.05.2004 Mezõgép located in Szolnok not sold
The first round of the tender called for selling Mezõgép Rt. located in Szolnok was not successful. As a result of this, aiming the selling of the company producing agricultural machines invitation for bids will be sent out for the second time as well. The former purchase money of 800 million forints net is lowered to HUF 730 million. (MH, p10)

HEAVY INDUSTRY - 12.05.2004 DAM Steel again for sale
After two unsuccessful bidding rounds, DAM Steel Rt., the operator of metallurgy in Diósgyõr, is again put up for sale by liquidator Mátraholding Rt. Net value of working assets necessary to continue manufacturing precious metals is HUF 5.3 billion and bidders have to undertake the further employment of Borsodi Nemesacélgyártó (BNA) Kft. employees. BNA, renting metallurgy, has been also under liquidation, but has not been operating for the last two and a half months. Liquidator of DAM Steel Rt. János Kovács said that Hungarian, Russian and Ukrainian companies were interested in buying the steelmaker and not only those, whose names had already been mentioned earlier. (Nszab, p 16, NG, p 5)

HEAVY INDUSTRY - 13.05.2004 Suzuki faces general meeting
The general meeting of Magyar Suzuki Rt. (Hungarian Suzuki Co.) will accept last year’s report and the business plan for this year on Monday. There were 89 215 cars manufactured in Esztergom. Calculated together with importation the company’s domestic sales added up to 40 thousand vehicles and Suzuki sold more 50 thousand cars in abroad. Napi Gazdaság (Daily Economy journal) learnt that the company’s sales revenue increased by 34 billion forints to HUF 183 billion. Sales revenue arising from exportation added up to approximately 103 billion forints. Suzuki expects a turnover of 200 billion forints this year. (NG p6)

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CHEMICAL INDUSTRY - 10.05.2004 Richter: Plan-B only with prescription
The Food and Drug Administration (FDA) of the United States said it would not allow the "morning after" pill to be sold over the counter. Plan-B, an emergency contraceptive is produced by Hungarian pharmaceutical manufacturer Richter. Observers note that there could be political motives behind the decision, since Conservatives would not like to make it possible that contraceptives are available over the counter. However, it is possible that the pill will be allowed as an OTC medicine, for example in the case if marketer Barr Labs. bans those under the age of 16 to buy it. (MH, 8-9 May, p12)

CHEMICAL INDUSTRY - 14.05.2004 Increasing profit at Egis
Egis achieved a consolidated profit of 3.14 billion forints in the first half if its business year ended in March. This exceeds previous year’s figure by 18.2 percent. The sales revenue improved by 6.78 percent to 41.4 billion forints. According to unconsolidated data the pharmaceutical company increased its profit after taxation by 18.5 percent to 3.3 billion forints, the sales revenue grew by 9.1 percent to 30.7 billion forints. Exportation in forints rose by 9 percent, while it expanded by 19 percent in dollars, domestic sales increased by 10 percent. (NG p11, p12, VG p18)

Pannonplast to close down its factory in Szombathely
Beside a sales revenue of 6 billion forints Pannonplast closed the first quarter of the year with a net loss of 405 million forints. Csaba Zoltán chief executive officer said: this result was „encoded” in the operation of the team. In order to discontinue the operation of departments making losses and to achieve profit already in this year, the company will implement a reorganisation. According to plans the company will close down the its manufacturing plant located in Szombathely by the end of June and they will dismiss 600 employees. Moldin Kft. located in Szombathely achieved a loss of 220 million forints in the first three months. The two limited companies Moldin Kft.-t and Moldin 2000 Kft. will be merged and they will continue their operation under the shareholding company will be named Pannonplast Mûszaki Mûanyagok Rt. (Pannonplast Technical Plastics Co.). The new company’s centre will be located in Székesfehérvár. Pannonplast will sell the following firms: Kaposplast Kft., Multicard Kft., Müki Kft., Pannonplast Karbantartó Kft. and Recyclen Kft.. (VG p18, NG p11, p12.)

ENERGY INDUSTRY - 11.05.2004 According to Mol’s opinion gasoline prices will not rise above 300
According to Mol’s opinion against the volatile climate in the international markets it is not probable that gasoline prices would exceed 300 forints. This is said by Ferenc Horváth the oil company’s managing director in the business-line production and commerce, the professional added: based on actual tendencies the customer price of gasoline will rise by 10-15 forint and diesel oil’s will probably increase by 10-20 forint. (MH, p9, NSZ, p5)

ENERGY INDUSTRY - 13.05.2004 Démász 1Q brought no surprise
Démász (South Hungarian Electricity Supplier Co.) achieved a net profit of 1.12 billion forints in the first quarter of the year, which is an improvement of 3.6 percent compared to previous year’s figure and this performance comes up with analysts expectations. Compared to previous year’s first three months the aggregated volume of electricity sold by the South-Hungarian Electricity Supplier Co. did not change. The sales revenue increased from 17.7 billion forints to HUF 19.8 billion, while income from operations grew from 1.4 billion to 1.7 billion forints. This year Démász intends to keep its profit achieved in 2003 at real value, but its open-market trading company D-Energia Kft. will expectably close this year with a loss of 100 million forints. (MH p13, VG p14, NG p11, p12)

Honeywell system in Százhalombatta
Oil and gas distributor Mol will have Experion PKS system manager and FSC security monitoring system installed in its sulphur removing plant in Százhalombatta by Honeywell. The investment costs USD 5.8 million. Hungarian subsidiary of the American company Honeywell Kft. is posting an annual turnover of USD 20 million. (VG, p 12)

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BUILDING INDUSTRY - 10.05.2004 Creaton builds factory in Lenti
Creaton’s new manufacturing plant, which is under construction in Lenti will expectably start to operate next spring. The company will employ 70 workers in its brick producing factory. The investment will be launched in June. The German company still intends to expand in Central-Eastern-Europe, however it is still not decided whether they construct their next manufacturing plant in Hungary or Creaton chooses another location in one of the new member states. (VG p6)

BUILDING INDUSTRY - 12.05.2004 Leier concrete tiles from Hajdúszoboszló
In the framework of an investment of half of a billion forints Leier Tégla Kft. (Leier Brick Ltd.) has built a concrete tile manufacturing plant in Hajdúszoboszló. The factory started to operate yesterday with 92 employees, who produce a daily quantity of tiles in different colours that would be enough to cover 10 private houses. The company group achieved a sales revenue of 19 billion forints last year and they intent to increase the turnover by 30 percent this year. Leier spent 5 billion forints on development last year, in addition to this according to the company’s plans the construction works of a further manufacturing plant will be started still in this year in Hajdúszoboszló. (MH, p10)

ELECTRONICS - 13.05.2004 Samsung could move cellular phone production to Hungary
Samsung will expectably translocate its cellular phone production from Spain to Slovakia or Hungary – announced Reuters. Due to high labour costs the Korean company producing one million handy devices annually is considering the close down its manufacturing plant in Spain. Samsung Electronics Magyar Rt. (Samsung Electronics Hungary Co.) has no information about the plan of translocation yet.. (VG p11)

TELECOMMUNICATION - 12.05.2004 UPC increased prices lawfully
Economic competition watchdog GVH declared that cable television service provider UPC acted lawfully when it increased its prices last year and it did not carry out an unfair cross-financing between different groups of subscribers. The office came to the conclusion that UPC’s last year profit figures - in spite of the debated price hikes - were significantly down on the sector’s average, thus larger tariffs were not against the competition law. (NG, p 5)

TELECOMMUNICATION - 13.05.2004 Westel to change its image within a month
Mobile service provider Westel that changed its name to T-mobile on 1 May has started a wide-ranging image changing campaign. Several billion forints are earmarked for the campaign with costs covered by German parent company of T-Mobile Deutsche Telekom. The design of Westel shops will change in a month and a T-Mobile day will be held 5 June with a free Sting concert. European Football Championships, held in Portugal next month, is a perfect opportunity to mark the name and image change, since T-Mobile is one of the main sponsors of the event. (VG, p 10)

TELECOMMUNICATION - 14.05.2004 Telecommunication Constant Arbitration Court set up
The 52-member Telecommunication Constant Arbitration Court (Hírközlési Állandó Választottbíróság) has started operation. The body is to decide in debated questions on the telecommunications market and its decisions are not subject to appeal and have the same effect as a state court decision of final judgement. The arbitration court has an exclusive licence to act in legal cases between Hungarian and foreign telecommunication service providers (telephone companies, Internet service providers and cable television companies), provided that contracting parties have agreed on that. Leading the arbitration court is Gábor Komáromi with deputies being Réka Lénárd and Gyula Sallai. Members of the body are delegated for five years and their mandate can be extended. (NSZ, p 5, VG, p 10)

INFORMATION TECHNOLOGY - 13.05.2004 Improving Graphisoft results
Graphisoft achieved a sales revenue of 6 million forints in the first quarter of the year, this is 6.6 percent less than previous year’s figure. At the mean time operating income increased from 714 thousand to 759 thousand euros and the profit before taxation rose from 989 thousand to 1.4 million euros. (VG p14, NG p12)
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Successful year-start at Synergon
The sales revenue of Synergon group decreased by 4 percent to 19.7 million euros calculated on euro base, however it increased by 1 percent to 5.03 billion in forint in the first quarter of the year. Income from operations grew by 40 percent to 59 million forints, while the profit after taxation increased to 79 million forints, which is more than twice as much as last year’s figure in the same period. The highest turnover (4 billion forints) is achieved by Synergon, Infinity seated in the Czech Republic achieved an income of 823 million forints and Span seated in Croatia realised a sales revenue of 301 million forints. (VG p13, NG p11, p12, MH, p13)

FOOD INDUSTRY - 10.05.2004 Kométa preparing to return
Kométa 99 Kft.’s Italian owner believes that in three months the plant’s former export performance will be set back to the original level – as it was said at the company’s workers’ assembly in Kaposvár on Friday. The company retained its export right as of the beginning of May. The limitation that lasted for half-a-year caused losses of HUF 300 million to the company.(NSZ May 8th p10, MH May 8-9th p9,MN May 8th p11)

FOOD INDUSTRY - 11.05.2004 Fino-Tej builds production base
Fino-Tej Szövetkezet (Fino-Milk Alliance) representing 32 producers of the region builds a plant in Kaposváron. The dairy will be able to produce 30 million litres of milk annually, the cost of the investment adds up to 1.5 billion forints. The development, in the framework of which a logistics centre will be constructed as well is located on the sometimes site of MiZo company. There will be 100 workers employed in the new plant. (NG p5)

FOOD INDUSTRY - 12.05.2004 Cartel suspicion on baby food market
Economic Competition Office GVH has started proceedings on charges of acting in cartel, this time on the baby food market. GVH is checking already in Switzerland and Italy how almost the whole Hungarian baby food market could go from American Heinz to Swiss-German Hipp in one contract for a price of only USD 2.7 million. The deal translates into one of USD 5 million at current prices. For this rate, Hipp got not only the trademark of baby food manufactured in Kecskemét, but for an additional USD 10,000 it got 50 traditional recipes. Besides this, Heinz agreed in a secret contract that for five years it would not manufacture and distribute baby food in Hungary. At that time, it had an 84 percent share of the market. (By now, the share of Hipp products from Kecskemét has gone down to 18 percent, since many competitions, among them Nestlé, have emerged on the market.) Should the contract between the two multinational companies verify the suspicion, the Economic Competition Office is likely to levy a significant fine. (MH, p 10)

FOOD INDUSTRY - 13.05.2004 Bábolna to bid for Pick Szeged
State-owned agricultural company Bábolna is set to buy meat processor Pick Szeged to create a strong national meat company - Bábolna’s chairman of the board announced yesterday. Zoltán Velez said that Bábolna Agrárholding Befektetési Rt., founded on Tuesday with registered capital of HUF 100 million is going to bid for the Szeged- based meat company. The purchase price is a business secret for the time being and will be covered from loan form Hungarian Development Bank MFB taken out with a government guarantee. The collateral for the loan would be Pick Szeged itself and around 16,000 farmers, in business contact with the meat processor could get an ownership stake with Bábolna Rt. getting out of the investment company. Plans call for producers buying not Pick shares, but rather shares of the holding and would be given an opportunity to pay the purchase price later in an owner loan construction. It seems that only Bábolna is enthusiastic with the plan at present: information has it that Chairman of Pick Szeged Rt. Tamás Kovács, currently in talks with American Smithfield Foods, did not wish to comment Bábolna’s announcement. As for Hungarian Development Bank, sources only stated that State Privatisation and Holding Company ÁPV Rt. is settling Bábolna’s debt for banks and the holding keeps up its development plans and the opportunity of crediting the Pick deal was also investigated. Géza Hegedûs, Chairman of Fat Stock and Meat Council (Vágóállat- és Hús Terméktanács VHT) is still not thinking that animal breeders, generating losses on a market suffering form overproduction, would want to make a deal with Bábolna, posting a deficit of HUF 2.7 billion. (Nszab, p 16, VG, p 7, NG, p 5)
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Old cigarette boxes to stay till the end of the year
As of next January, only cigarette boxes meeting European Union guidelines, that is, with a thick black border, can be manufactured. However, a regulation makes it possible that till the end of the year old boxes can remain in circulation. According to calculations, a total of HUF 4 billion worth of those boxes is still in retail outlets. (NG, p 5)

FOOD INDUSTRY - 14.05.2004 „Makói” garlic from China
No garlic produced in Hungary can be bought in the Hungarian market since November last year – said a farmer interviewed by Népszabadság (People’s Freedom daily journal). László Német onion grower imports cheap garlic from China, which he packs in Makó then forwards the product to his commercial partners. According to him this is not misleading customers at all, because they indicate the place of production on the packaging of „makói” garlic. Based on information arising from another person (did not want to reveal his identity) managing a market leader company in the field of garlic trade, all Hungarian slaughterer houses use garlic from China for flavouring their products.(Nszab, p1, p15)

Parmalat making losses
According to preliminary figures, dairy products manufacturer Parmalat Hungária Rt. posted a HUF 500 million loss in the first quarter of the year. Claims of creditors against the company exceed HUF 7 billion. According to liquidator Ferenc Somogyi, Parmalat may reach the phase that its assets could go sold at a realistic rate in one and a half years. Plans call for the first bidding process for Parmalat in summer of 2006 after the balance sheet for 2005 is finalised. Somogyi has started negotiations with employees on staff reduction. A total of 129 persons will lose their jobs on 5 June. In the meantime, the dairy products manufacturer has taken out a HUF 700 million loan from Raiffeisen Bank. (NG, p 1 and 4)

AGRICULTURE - 11.05.2004 Agrarian prices on the increase
Compared to previous year’s same period the producer prices of agricultural products increased by 13.8 percent in March – informed KSH (Central Statistics Office). The growth in January – March added up to 14.5 percent. The price level of agrarian products exceeded last year’s figures by 16.1 percent in February and by 14.9 percent in the first two months of this year. Compared last year’s the first quarter to the same period of 2002, the producer price level of agricultural products was 0.3 percent higher, and 4.3 percent higher in the month March. (NSZ, p5, MH, p9)

AGRICULTURE - 12.05.2004 Degussa AG acquired Agroferm Rt.
German chemical industrial concerne Degussa AG acquired Agroferm Magyar-Japán Fermentációipari Rt. (Agroferm Hungarian-Japanese Fermentation Industrial Co.). Agroferm that was earlier owned by the Japanese company Kyowa Hakko Kogyo deals with growing fodder crops. The German conerne closed its last business year with a turnover of 11.4 billion euros. (VG p11)

TRADE, FAIRS - 10.05.2004 Harsh competition on white goods market
Price level of household machines went down by 3.4 percent in Hungary last year, thus white goods were the cheapest among new accession counties of the European Union. As a comparison, these products are 10-12 percent cheaper in Hungary than in the Czech Republic. Alado Taddeo, General Manger of household products manufacturer Merloni Indesit Kft. does not foresee price increase this year. However, he adds that within a short period time, demand in Hungary would grow for higher quality and more expensive products in parallel with the increase of living standards and changes in buyer approach. Ákos Kozák, General Manager of market research company GfK Hungária Piackutató does not expect price hikes, either. He argues that at present, buyers decide on the base of the product’s price. He adds that after Hungary’s accession to the European Union, competition is set to be larger and manufacturing companies automatically meaning lower prices could also emerge on the market. (NG, p 4)

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TRADE, FAIRS - 11.05.2004 Lidl stores to open up in weeks
For an efficient start German Lidl the number one discount store chain in Europe will open up 12-15 stores in just a few weeks. Lidl is known in Hungary as a supermarket offering products at low prices. The German company plans to build up a network of 200 stores in Hungary in two years. The company has already bought sites in many locations in the country and recruiting employees is already in process. There will be stores built in Kaposvár, Tapolca, Gyula, Kisvárda, Csongrád for sure, the company has already established residences in Székesfehérvár, Veszprém, Szeged, Pécs and Debrecen, but there will be Lidl stores to find in the 9th and 18th districts in Budapest as well. Experts say Lidle’s entry into the market will cause such an explosion in the food market just like Electro World caused in the market of electronic devices. Due to the arrival of the new competitor other huge store chains are also not inactive, but more of them started to expand, broaden their network and offer a wider scale of goods, in addition to this they take efforts to make so many special sales as possible. Experts explain the following facts like Spar acquired Kaiser's stores last year, plus Profi is merged into Csemege Match, furthermore Teso, Auchan and Cora will hand over at least a half of a dozen huge hypermarkets this year by Lidl’s appearance in the Hungarian market. (MH, p11)

TRADE, FAIRS, CAR - 11.05.2004 Rent-a-car service provider company established under the name Pennycar
Eurent rent-a-car company owned by Porsche Bank founded a new enterprise. At the time being Pennycar operates only one office located in the capital, the company is targeting the segment looking for cheaper rent-a-car services, especially young people and small- and medium size enterprises. The company’s fleet includes 10 Skoda Fabia passengers cars, but they intend to increase the number of vehicles to fifty in the near future. The company expect a sales revenue of some 10 million forints from the new brand in the first year. The cars can be booked via the Internet as well. (NSZ, p5, MH, p10)

TRADE, FAIRS, CAR - 12.05.2004 Test production of the new Suzuki starts in the autumn
Magyar Suzuki will expectably start the test production of its new sporty car in November. The serial production of the model named „Concept S” or „New Concept Car”, which – beside Hungary - will be produced in Japan, China and India as well, can take place in Esztergom in the beginning next year. Due to this new production the number of cars manufactured daily will increase from 350 to 600. In the framework of the investment programme (launched last year) needed for the implementation of increasing production, the company will spend 60 billion forints on developments this year. The total budget adds up to 100 billion forints. Due to this programme the number of employees work in the factory will grow by 400 workers to 2300 this year. (VG p11.)

TRADE, FAIRS - 13.05.2004 Foreign suppliers in talks with multinational chains
The last days have seen the emergence of foreign suppliers at multinational chains - economic daily Napi Gazdaság has learnt. Networks are not giving information on ongoing talks, but information has it that Dutch, Slovenian, French and Slovakian dairy product manufacturers would like to distribute their products in Hungary, together with Danish and Irish meat processors, Italian, Spanish and French wine producers and South European fruit producers. Retail chain CBA had talks with suppliers from former Soviet block countries early May, but more recently German and French companies have also entered the scene. According to National Association of Entrepreneurs VOSZ, foreign products will enter Hungarian shops in half year with real price war and dumping of goods coming most likely late autumn and before Christmas. Calculations of National Trading Association (Országos Kereskedelmi Szövetség) show that the current 11-13 percent share of imported products might double till the end of the year, putting a large pressure on Hungarian producers. Experts are most afraid of retail chain Lidl, which is not going to build on local suppliers. Market observers add that competitors can not help entering the future price war. (NG, p 1 and 4)

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TRADE, FAIRS, CAR - 13.05.2004 Cars getting more expensive from Thursday
The modified registration fee table will take effect tomorrow. In comparison with fees at present, for cars in group Euro 2 or worse the tax will go down in four categories, whilst in others it will increase. Mainly those putting into operation Euro 3, especially new cars can expect to pay more in taxes. As for the turnover of the past weeks, dealers are giving quite different reports. Ford is not going to carry out large price changes. It sold 79 percent more cars in the first quarter than in the corresponding period, whilst April figures are 25 percent up on a year earlier. Schiller Opel, however, reports worse results. FIAT is to publish its new price list on 17 May, containing larger prices for many models. Porsche Hungária had better sales figures for Skoda cars, whilst Volkswagen posted worse results. Audi sold better in April, whilst Seat did not see significant changes in sales. The campaign of Magyar Suzuki led to higher number of cars sold in April. The National Association of Vehicle Dealers (Magyar Gépjármû-kereskedõk Országos Egyesülete) is still against the introduction of the registration fee. (VG, p 6)

TRADE, FAIRS - 14.05.2004 New shopping centres near Auchan stores
Real estate developer of Volksbank is going to bring a new commercial form to Hungary. Ablon Kft. is to build so-called stripmalls by the first quarter of next year near Auchan stores in Dunakeszi and Soroksár in an area of 20,000 and 12,000 square meters, respectively. The investment has a price tag of EUR 25 million. The main point is that all shops open to the street and there are no joint areas. The newest products will be sold at much lower rates than in the centre of Budapest and rental fees will also be lower. A total of 1-1.5 million shoppers are expected to turn up in these new shops. Jean Paul Filliat, General Manager of Auchan Magyarország said that they were buying large plots of lands for their outlets, so that there is a large space to build department stores providing supplementary services. On large, 40-50 hectare areas they are planning to build giant shopping centres, for the time being near the capital. Auchan has 8 outlets at present and it plans to build 15 new hipermarkets in the next five years. (NG, p 5, VG, p 7)

TRAFFIC, TRANSPORT - 10.05.2004 Decreasing loss at Malév
Malév (Hungarian Airlines) closed the first quarter of the year with a loss that was 1.5 billion forints less than expected. Regarding last year’s developments László Sándor chief executive officer highlighted the agreements entered with Chinese Hainan airways and the contract signed with CSA of the Czech Republic, in addition to this the leader accentuated the Hungarian airline’s accession to SkyTeam alliance. Malév plans to operate at break even this year. (NSZ May 8, p5, MH May 8-9, p12, MN May 8, p11)

TRAFFIC, TRANSPORT - 14.05.2004 Motor Road M5 free of charge until Gyál
In accordance with the decision made by the extraordinary session of Hungarian government held yesterday motor road there will be no charge to pay on motor road M5 on the stage between Budapest and Gyál. The regulation on this issue will be published by István Csilag minister of economic affairs. On the other hand construction of the new stage of the motor road M5 between Kiskunfélegyháza and Szeged will start at the beginning next week. The length of the stage is approximately 50 kilometres, the cost of the project will add up to 93.3 billion forints and according to government’s plan it will be handed over by the end next year. (VG, p5)

Frontier crossing point on water under construction in Mohács
The water frontier station will be handed over in Mohács by 2007 at the latest. This crossing point will monitor the goods- and personal traffic on water to Hungary from the Southern direction in a way that will meet the requirements of the Union. (MH, p9)

MÁV may lose its creditworthiness
The stock of loans at National Railways MÁV Rt. may reach HUF 151 billion next year. At the same time, continuous loss of assets has meant that its wealth has gone down to HUF 180 million, exceeding the creditworthiness limit of the railway company - Chairman of Board of Directors László Udvari said in a railway conference. MÁV’s business plan forecasts a loss of HUF 48 billion after last year’s corresponding figure of HUF 33 billion. (MH, p 9)
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TOURISM, HOSPITALITY - 10.05.2004 Hotels are performing well
Easter weekend was good for the catering industry. This April the occupancy rate of hotels was relatively high. The utilisation of at least three-star hotels was 61.1 percent compared to 54.8 percent in March and 43.2 percent in February. The number of guest nights exceeded that of the previous year by 9.3 percent and the gross room revenue increased by 16.3 percent. (NG p3)

TOURISM, HOSPITALITY - 13.05.2004 More tourists visited to Hungary
The number of visitors increased by 8.1 percent, while the number of guest nights in hotels grew by 9.6 percent in the first three months compared to previous year’s first quarter’s figure – announced KSH (Central Statistics Office). 415 thousand guests from abroad were put up in commercial accommodation places in the period between January and March , the visitors spent 1.3 million guest nights in Hungary. (NSZ, p10)

SERVICES - 11.05.2004 Up-to-date company data via cellular phones
KJK-Kerszöv Kft established a company data base that can be accessed free of charge. The service can be utilised with no restrictions by everyone uses cellular phone with WAP browser. The WAP Company news service enables searches on company name, tax registration number and company register number under the address http://wap.ceghirek.hu. (MH, p10, NSZ, p10)

SERVICES - 13.05.2004 Hungarian Post fined HUF 10 million
Telecommunications watchdog NHH has levied a fine of HUF 10 million on Hungarian Post (Magyar Posta), since it has detected in checks of mid-March that the company „forgets” to put a stamp on packages or at least on some of them. Without a stamp, it can not be traced when a pack was sent and significant delays of distributing packages also can not be complained about. Also playing a part in NHH’s decision was the fact that Hungarian Post has distributed thousands of letters and packs with delay of several days and even weeks on the back of a failure in its distribution centre in Budaörs recently. (The official investigation started some days after the failure.) Magyar Posta has appealed against the decision, citing reasons that it has made an agreement with the leader of Telecommunications Supervisory (Hírközlési Fõfelügyelet), the predecessor of NHH that for the lack of an appropriate technical background they would not stamp all letters sent at the same time before the new centre was operational. (MH, p 11)

INVESTMENT, DEVELOPMENT - 10.05.2004 Motorway M7 to be built further
The contract on the construction of motorway M7’s 12.4 kilometre stretch between Zamárdi and Balatonszárszó has been signed. The investment takes HUF 74 billion to complete. The selected bidder is the Völgyhíd consortium, made up of Hídépítõ Rt. and Strabag Rt. Construction works are to start this June and plans call for the completion in November 2006. (NSZ, 8 May, p 5, MH; 8-9 May, p 9, MN, 8 May, p 13)

PannonPower to build water power plant
PannonPower Holding Rt. is planning to establish several smaller power plants providing for regional needs, mainly in the Southern part of Baranya county. Other plans call for the construction of a water power plant in the Mecsek area. The company would like to make use of recurring energy sources and to this end it has started a HUF 700 million research and development program, thanks to which the energy production of the whole region may be renewed. Smaller regional power plants would be heated by biomass, coming from agricultural waste at villages. The construction of the so-called turbine-pump water power plant in the Mecsek mountains would cost HUF 35-40 billion at current prices and would be built in the place of the coal mine of Vasas, waiting for re-cultivation and a nearby quarry at 250 meters above sea level. (NG, p 5)

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INVESTMENT, DEVELOPMENT, REAL ESTATE - 10.05.2004 Development of several billions in Búza square in Pécs
Wigo Ltd. builds an office and business centre in Búza square in Pécs. As a result of the investment of HUF several billions the company will establish 52 apartments on the upper floors and a two storey underground garage. Construction will start this summer and is expected to be completed by 2006. On the southern park of the square a multifunctional civic park will be created. (NG p18)

INVESTMENT, DEVELOPMENT - 11.05.2004 Balaton Plaza to be handed over by the end of May
Plaza Centers Magyarország Kft. (Plaza Centres Hungary Ltd.) operating 15 shopping centres in Hungary will hand over its latest real estate development Balaton Plaza on May 27th. Together with the amount 12 million euros spent on implementing the shopping centre in Veszprém the aggregated sum invested by Plaza Centers Co. in Hungary in the past 9 years adds up to 512 million euros. Zvi Bochman Plaza Centers’ chief executive officer said: the success of the company’s acting in the Hungarian market is hallmarked by the fact that 60 million customers had visited the comany’s Hungarian shopping centres last year. There are 2500 people employed in these malls. Plaza Centers intends to broaden its network with additional units located in country towns in the future, they do not plan to build a further store in Budapest. (VG p7)

MKB Hungária heading abroad
In order to increase sales revenue MKB Hungária producing fitness machines and different coverings intends to establish independent commercial networks in the EU countries. First of all the company will found a subsidiary in Germany. MKB Hungária expect a sales revenue of 700 million forint this year, just like previous year. (NG p1, p3)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 11.05.2004 Changing ownership structure at some Wallis subsidiaries
The ownership structure of two subsidiaries of Wallis Ingatlan Rt. has changed. At Crow Holdings Magyarország Kft., there will be no direct owner and ownership stake of one of the founders Crow Holdings International will go to C+T Holding, owned by the former company and to two German companies. In parallel, the name of the company will be changed to Harbor Industrial Developer Kft. As for Trammell Crow Wallis (TCW) Ingatlanszolgáltató Rt., Wallis Ingatlan has raised its ownership from the former 50 percent to 100 percent after buying the stake from Trammell Crow Company. The company, rendering services to telecommunications company Matáv and oil and gas distributor Mol among others, will use the abbreviation TCW in the future, too. (NG, p 5)

INVESTMENT, DEVELOPMENT - 12.05.2004 Concash moves production to Hungary
Since Concash decided that - due to the lower production cost in Hungary - will concentrate its productiuon in Hungary, its subsidiary Seton-Lindgens Feldolgozó Kft. (Seton-Lindgens Processing Ltd.) builds a new production base of 4 thousand square metres and a logistics centre in Pápai Ipari Park (Industrial Park of Pápa). The parent company is one of the market leader leather processing companies in the world. The competent person at Concash will disclose details of the deal in the near future. (NG p4)

Electrolux: hoover factory in Jászberény will be expanded by additional production
Electrolux moves its hoover manufacturing plant located in Sweden at the time being to Hungary. The one shot cost of the translocation adds up to 200 million Swedish crowns and the company expects a saving of 150 crowns annually. The translocation will be finished in the first quarter of the year 2005. Due to this development the hoover manufacturing plant of Electrolux located in Jászberény will be a European production centre and the number of employees will increase by 200 workers. According to Electrolux’s intentions this deal will be a part of Gripen-offset, however this has to be approved by GKM as well. The subsidiary of Electrolux closed its lst business year with a sales revenue of 113.4 billion forints, which exceeds previous year’s figure by 17 percent. The company employs altogether 3 thousand people in Hungary. (NG p5, VG p13)

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INVESTMENT, DEVELOPMENT, REAL ESTATE - 13.05.2004 British buying spree in Central Europe
British, Irish and American citizens bought a total of almost 400 real estates in Hungary, mainly in Budapest. Figures from the first quarter of this year show that the same number has been reached already now, which leads to forecasts that the number of real estate purchases might go up even twofold. Investors or British and Irish executives looking for flats have turned up in other countries of Central Europe. Several English, Scottish and Irish analysts and agents have suggested clients that it was worth to invest their money in real estates in Hungary, Croatia, Slovenia and Bulgaria. (VG, p 1 and 19)

Hungarian shopping centres in French hands
A total of 12 Hungarian shopping centres have been bought by Klepierre SA from the interest group of BNP Paribas - Bloomberg reported. The deal took EUR 285 million to complete. The real estate developer company, through the Hungarian deal, got a 50 percent stake in seller Plaza Centers belonging to Elbit Medical Imaging Ltd. (VG, p 1)

INVESTMENT, DEVELOPMENT - 14.05.2004 Demján going to Tököl
Construction company TriGránit group would like to build an airport to service budget airlines in Tököl. Should they manage to make a deal with State Privatisation and Holding Company, TriGránit, managed by businessman Sándor Demján, could get licenses. After that they need to make agreements with commercial partners and first budget airlines may start using the former Soviet military airport next summer - General Manager of TriGránit Sándor Nyúl said. As for the amount of the investment, he did not go into details, but he did state that they would like to get the ownership rights of the 414-hectare area at any price. There is no analysis on how much the investment could cost, but the thing that Debrecen has spent a total of HUF 3 billion to modernise the local airport there can serve as a hint. (Nszab, p 14)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 14.05.2004 Flat prices significantly up in the first quarter
The Budapest real estate index of real estate firm GKI-Wallis has worsened from -18.3 points to -22.6 in the first quarter of the year, whilst the indicator of the flat market has gone down to ‘56 points. Data of the survey reveal that new flat prices were significantly up in the first three months of 2004 with developers reporting a 9 percent price hike and marketers a 6 percent one on the corresponding period last year. As for resale homes, prices have gone up by only 2 percent. The retail space market has also seen a dynamic upturn with price increases exceeding the inflation rate in good places, whilst the office market is still supply-driven with occupancy rates stabilising at 70-78 percent. The survey forecasts an 11 percent price hike in plots of land, an 8 percent one for retail spaces, 7 percent larger prices for warehouses and plants and a 6 percent more for offices in the next 12 months. New home prices may go up by 9 percent and resale ones by 7 percent in the same period with the occupancy rate of offices increasing by 1-2 percent. (NG, p 5, NSZ, p 5, VG, p 4)

SECURITIES’ MARKETS - 10.05.2004 Dividend disbursement before acquisition
Édász (North-Hungarian Electricity Supplier Co.), Dédász (Trans-Danubian Electricity Supplier Co.) and Titász (Trans-Tisza Electricity Supplier Co.) pay dividend as of June 8th. This means that small stockholders draw their percentage earnings before the company accepts the buy-out proposal of E.On. Édász pays 1330 forints, Dédász 1000 forints and Titász disburses 835 forints. (MH May 8-9, p12, VG May 10, p10)

MUNICIPALITY - 10.05.2004 Residential park next to the bath in Marcali
Within the frame of the municipality’s city rehabilitation programme a 90 apartment residential park including shops and garages can be built next to the thermal bath in Marcali. The amount arising from the sale of the land will be spent on the purchase of additional real estates located close to he bath, where also apartments and a recreational centre will be built. Plans include the construction of a thermal hotel as well. (NG p17)

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PUBLIC HEALTH - 10.05.2004 Foreigners among medicine buyers
President of the Chamber of Hungarian Pharmacists does not know that foreigners used prescriptions in Hungary since the EU accession, but she reported that in Somogy County a few foreigners purchased 50100 boxes of products that are available without prescription. Katalin Hável Szatmári does not exclude that due to the low price level demand would leap for Hungarian products that are available with doctor‘s prescription. For citizens of the EU medicine is due with the same subsidy as for Hungarians, but doctors have to indicate additional information on the back of the prescriptions and pharmacies shall handle these prescriptions separately. As of January new forms will be introduced, the cover of which includes additional EU information as well. Mrs. Hável thinks that the state shall compensate medicine prices, because if medicine would still be traded at pressed prices, additional closings can be expected. According to the president of the chamber pharmacies‘ bad situation is not only a consequence of freezing prices, but also the result of a longer process. (VG p4, NG p3)

MEDIA - 12.05.2004 New commercial director at Viasat
As of 17 May, András Kárpáti will fill in the position of commercial director at Viasat Hungária Rt., after Judit Szalóki is leaving on mutual consent. Kárpáti has earlier been working at an executive position for Multireklám Köztéri Médiaügynökség (Multireklam Media agency). (VG, p 11)

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