Building on the Values of the Glorious Past

Hungary’s internationally renowned lighting company Tungsram celebrates the 125^th anniversary of its foundation this year. Its President & CEO Joerg Bauer tells Diplomacy&Trade about the firm, the brand and how this history was intertwined with that of Hungary.

“We have been very much looking forward to celebrating this anniversary. Under the present circumstances, we will celebrate modestly and mostly in the second half of the year, hoping that by then, we can organize an in-person celebration. In the meantime, we are also planning some online events and initiatives”, the President & CEO highlights.
Looking at the history of the company that started in 1896, he is of the view that “practically, Tungsram is a brainchild of the second industrial revolution sometimes defined by electrification and combustion engine. If you look at Hungary, it is a kind of intertwinedness between the country and Tungsram. Hungary was booming at the end of the 19th century, Budapest was the world’s second most dynamic city after Chicago, with another boom coming with the millennium celebrations of the Hungarian state. In this great period of optimism, a lot of great brands of Hungarian industrial history were born: Ganz, Láng, Rába, Ikarus, etc. – and obviously, Tungsram. Those companies were the disrupters of their time. Tungsram was one of the very first companies to use the idea of Thomas Edison to produce electric light and made it available to everyday people that could enjoy the light in their homes. This is the same spirit when we are facing the fourth industrial revolution, the same spirit we are leaning back to and building on.”

Rebuilding international ties
After World War I, in which Hungary had been on the losing side, Tungsram was cut off from many of its traditional markets. So, people like Lipót Aschner were needed. Building on innovation, he not only founded the famous industrial lab of Tungsram, the first of its kind on the continent, following Thomas Edison’s example in the U.S., attracting scientists to run it but he also founded the institute for radioactive research at the Technical University of Budapest in the middle of the global financial crisis. “He understood – and that was the first phase of international expansion – that we have to be present in other countries. He very deliberately chose countries, established trade offices and even factories in other parts of the world. Interestingly enough, we are getting to a very similar phase now. The first phase, if you want, of globalization seems to be coming to an end. This was happening before the pandemic but the coronavirus situation accelerated the process and to some extent exposed the weaknesses like the fragility of global supply systems. So, our strategy building on the past is to deliberately find partner countries – some of those countries we have been present in for more than a hundred years – and go deep in our relationship with those countries. So, we would like to be a global company that is also a local company on those markets. On the other hand, we have a unique company-in-the-box offering for investors entering the EU with minimal up-front investment enabled by shared Tungsram infrastructure and resources in Hungary,” Joerg Bauer points out. He mentions the Middle East and North Africa as examples. Tungsram announced investing in Abu Dhabi: into local factory and local agricultural technology showcase, into training local employees, into connecting local universities with Hungarian ones and into pushing the boundaries of this technology. “So, basically, we are doing what was done in the first golden age of Tungsram,” he adds.
Then, after World War II, the situation changed but still, Tungsram, now behind the Iron Curtain, was able to maintain its global competitive position even after being cut off from most of the modern technology, having lost its Western subsidiaries and investments. Between the end of WWII and 1989, the start of the regime change in Hungary, Tungsram managed to compete not just in the Eastern Bloc but also in many of the ‘capitalist’ countries. Celebrating this glorious past inspires today’s management and staff as they are getting ready for the next 125 years.

Caring for the environment
“Our employees have long been active members in their respective communities. We are trying to contribute to the well-being of communities, e.g. helping to build playgrounds, cleaning green areas. It is a natural feeling, our colleagues do not expect any special reward for it,” Joerg Bauer stresses. “We are now looking at the environmental impact of our business. If you reduce energy consumption, it is obviously good for the environment but also for the profit-and-loss statement as you produce more with the same amount of resources. It means that caring for the environment and profitability do not contradict each other. We also do that by choosing the activities we are investing in: food security, healthy and livable environment, smart buildings, smart cities where the big focus is on energy efficiency. The latter has two positive impacts: it reduces pollution, the ecological footprint and on the other hand, it reduces costs. We believe both have to happen, thus, the adoption rate of the technology is higher. We are using the financial aspect of energy efficiency so many of our customers are opting to get those solutions, e.g. modernizing buildings in which we take full responsibility for the project up to a 10-15-year warranty period and they don’t have to put their own money on the table. The benefit is having a healthier building for the tenants, the citizens,” he explains.

Partnering with diplomats
The Tungsram President&CEO says he has a lot of interactions with Hungarian diplomats abroad and foreign diplomats in Hungary. Highlighting just two of them, he mentions two recently departed ambassadors accredited to Hungary. “We had close cooperation with British ambassador Iain Lindsay, in e.g. doing research programs with British universities in agriculture and farming, and we share the passion of learning the Hungarian language that we both managed to a certain extent.”
The other example is that of Saudi ambassador Mohammed A. Almatrafi. Joerg Bauer was also working with him in his capacity as the Hungarian Co-President of the Saudi-Hungarian Business Council. (He holds that post in the Egyptian-Hungarian Business Council as well.) “We had close interaction with the Saudi and Egyptian ambassadors and their teams,” he adds.
The Tungsram President&CEO is of the view that Hungarian ambassadors and their teams can also consider themselves as business outposts. “Their activities are very useful in opening doors in their respective host countries for businesses like us. You can see a lot of business opportunities in various countries and if a Hungarian company, like us, wishes to explore those, you can’t just call up and say ‘I’m Mr. Bauer from Hungary…’, it is much easier and smoother if the Hungarian ambassador there helps set up a meeting with decision makers.”
Regarding a new initiative, he says it is only logical that Hungary has just set up a diplomatic academy where business and diplomacy meet. “We are very proud that we are one of the first companies to contribute to this program. We are also sending our own people to be trained there. This role of diplomats to be cultural bridges between their home state and host country is very important. Add to it the business understanding and we have the winning formula!”