Creating Value for Danish Companies

There are between 100 and 110 Danish subsidiaries in Hungary and these companies employ over 20,000 people altogether, while in bilateral trade, Hungary has a surplus, Dániel Péter, Commercial Advisor at the Danish Embassy tells Diplomacy&Trade. He also details the activities of The Trade Council that assists Danish companies with export and investment promotion services.

The presence of Danish firms in Hungary is widespread, both in terms of sectors and geographic locations. Among the big manufacturing facilities, Dániel Péter mentions Coloplast, which is making ostomy bags and advance wound care products; one of the biggest LEGO factories in the world is located in Nyíregyháza, NE Hungary; Nilfisk producing industrial cleaning machines; and Grundfos, the renowned pump producer has a significant presence in Trans-Danubia. An example for smaller factories is Hagens, which is making smaller springs for different kind of industries.

“We have the roof window specialist Velux, of course, which is not only the oldest Danish, but the oldest Western European company in Hungary. They came even before the change of the political system here in 1989-90. There is also Paccor, a producer of packaging material, which was acquired by a Danish company a few years ago. Also making packaging materials, specifically egg holders here, is Hartmann. Rockwool is producing insulation for buildings. In the pharmaceutical industry, we have Xellia making Active Pharmaceutical Ingredients (APIs), while Abacus is engaged in parallel imports of prescription medicine from other countries. In SE Hungary, we have Vestfrost, a leading producer of commercial cooling appliances and, a little odd one out, a Danish owned pig farm in Gádoros,” he highlights.

Bilateral trade
According to the latest summary, exports from Hungary to Denmark include mostly vehicles, machinery and electronic equipment as well as some pharmaceutical products. “What these Danish companies produce in Hungary usually go for the European markets in general, not specifically for Denmark or for Hungary. When it comes to the flow of trade from Denmark to Hungary, the biggest category is machinery and mechanical appliances as well as some kind of plastic products. This has mostly been the same trend in the past few years. If you look at the actual numbers, you will see that the export from Hungary to Denmark is much bigger than the opposite direction. So, Hungary has a surplus,” the Commercial Advisor notes.

Economic diplomacy
The Trade Council is part of the Ministry of Foreign Affairs and assists Danish companies with export and investment promotion services. Dániel Péter, who is also a representative of The Trade Council at the Embassy of Denmark, points out that in recent years, there has been a new strategy trying to integrate The Trade Council more into the general diplomatic activities of the embassies, as part of a broader concept of economic diplomacy. “At the same time, they want to keep The Trade Council as a trademark because it has been a well-known brand for the past 20-30 years. It is important to mention that our local activities are aligned with the global strategy of the MFA and, more specifically, with the region-specific goals. The Central Eastern European region that we are in is quite big. It's not only Poland, Czechia, Slovakia and Hungary but also the Balkan countries as well as Romania, Moldova, Ukraine, Georgia and Armenia. We have a regional coordinator in Prague and he helps put together common projects. I'm trying to get involved in these as well with specific market and sector knowledge, or by putting together a delegation from Hungary. Of course, each trade advisor in each country has their own goals and their own bilateral relations with the companies as well.”
He also stresses that The Trade Council works, in a way, like a consultancy agency. “The companies pay for the services that we do for them. On the other hand, we have the advantage that we, as part of the Embassy, have a long-term and active relationship with the government, the ministries and the local business community, and it really helps to open doors, especially if the Ambassador is the one who's initiating a meeting. Thus, it really combines the best part of diplomacy and commerce.”

Business clubs
The Danish Embassy in Budapest is trying to get together the Danish subsidiaries in Hungary plus every organization or company that has some kind of interest in doing business with a Danish company or Denmark, providing platforms for such meetings. Originally called the Danish Business Forum, established at the Embassy’s initiative in 2006, the Danish-Hungarian Business Club offers an excellent platform for networking, knowledge sharing and market information. In addition, members are invited to cultural activities organized or supported by the Embassy. Its programs are headed by the Ambassador and the Trade Advisor.

“We have members in the Business Club that are not Danish subsidiaries but have Danish clientele or some kind of a personal relationship with Denmark. So, I would say that we are very open to have companies and organization join, they don't have to be specifically Danish. The concept is that, as Denmark doesn't have a chamber of commerce in Hungary, we are also trying to cover that area and represent these companies towards the government. We organize networking events, usually business breakfasts, three or four times a year at the Embassy or at the Ambassador's residence. We invite a guest speaker, either an expert or a government representative, and then we have a very informal discussion with them,” Dániel Péter explains.

He adds that “there is also a second, more tailored platform, called the Executive Business Club, for leaders, CEOs, CFOs, country managers of the biggest Danish subsidiaries here in Hungary. For them, we organize exclusive lunches at the Ambassador's residence. Again, the goal is to invite people who might be of relevance to these company officials with their unique insights. Of course, what we also do is trying to build up a good cooperation with other chambers of commerce in Hungary or other business clubs. If they have an event that might be relevant for our members, we also share it.”

The Danish Embassy is also a partner in the Nordic Business Forum, held every year. Each time, it is organized by a different Nordic embassy or chamber of commerce in Budapest. Its goal is to bring together the biggest subsidiaries of companies from all the Nordic countries for a very high-level networking reception. It's usually organized in the end of the year.

Creating more value for companies
In the second half of this year, it is the Kingdom of Denmark that holds the rotating Presidency of the Council of the European Union. As Dániel Péter puts it, “this Presidency doesn't concern the trade agenda per se, but it certainly helps that Denmark is more in focus. Most of our initiatives are directly aligned with one of the Presidency’s goal: ‘a competitive and green Europe’. In the end, what we do together with the Ambassador is help our companies become more competitive and energy-efficient in the Hungarian market. In the long term, my personal goal is to make the Danish-Hungarian Business Club more attractive, and get new members to join for the benefits and added value we provide, not only with the networking events, but with market assistance, and active B2G relations.”