The Flanders Investment & Trade (FIT) representation office in Budapest has two main missions: assisting Flemish companies in their export activities to Hungary and attracting Hungarian potential investors to Flanders.
As the head of the office, Trade & Investment Counsellor Szonja Bender, explains to Diplomacy&Trade, most of the Flemish companies who contact their office are newcomers to the Hungarian market. “We provide them with market analyses, research and a list of potential partners, linking them with sectoral associations. A small number of exporters already had experience in the CEE region, possibly also in Hungary. For them, we usually carry out a more targeted business partner search by compiling a short list with direct contacts to companies with whom they can expand their partner base in Hungary. In most cases, a representative of the Flemish company will personally visit us during this phase and our office will organize bilateral meetings. About once a year, we receive Flemish companies in the form of business delegations organized either by FIT or VOKA (Flemish Chambers of Commerce and Industry). The latest such mission took place this past September when 20 Flemish companies visited Budapest with a multisectoral delegation. We organized two days of business meetings in a hotel, bringing together nearly a hundred Hungarian partners for them. It was very successful and it actually was the first physical visit abroad organized by FIT since the pandemic closures. The Flemish companies were very happy to be able to travel again in person for export development. Feedback showed that more than half of the participants had already signed a contract with a Hungarian distributor after the mission.”
The Counsellor highlights that Flanders has active trade relations with Hungary, with trade increasing year by year. Although the year 2020 saw a 7-8% drop due to the global financial crisis, both exports and imports increased the following year by 20%, fully making up for the previous year's shortfall. In absolute terms, Flemish exports to Hungary amount to EUR 2.7 billion and imports EUR 1.8 billion. Flanders traditionally has a positive external trade balance in this relation. In terms of both exports and imports, machinery and mechanical appliances, chemical and pharmaceutical products and automotive products are the most important product groups. “Based on specific requests received by our office, I see a particular interest from food producers (organic, free, beer, chocolate), machinery and equipment manufacturers, but we also receive frequent enquiries in the fields of sustainable energy, digital technology and pharmaceuticals. There is also high interest in the automotive industry, a key sector of the Hungarian economy. Flanders is a very open economy, the 16th largest exporter in absolute value worldwide. The region accounts for 80% of Belgium's exports, and this proportion is similar to Hungarian-Belgian and Hungarian-Flemish economic relations,” she says.
Belgium is among the ten largest foreign investors in Hungary and Flanders has a fair share in investment relations with Hungary. The majority of Flemish investors established their subsidiaries in Hungary in the early 2000s. The flagship Flemish investor is KBC with its Hungarian subsidiary K&H bank. Among the larger manufacturing companies, Szonja Bender mentions Samsonite's plant in Szekszárd; Resilux's plant in Tuzsér, producing PET bottle preforms; Stephex's horse trailer company in Székesfehérvár; Krismar in Pákozd, with a similar profile; Soudal's logistics distribution center in Budaörs; and Pacapime's cardboard factory in Mórahalom. For Flemish investors, Hungary is still an attractive location, especially because of the improving absorption capacity of the Hungarian market, and there are ongoing expansions of Belgian-owned factories in Hungary, she adds.
Knowing the local market
As the Counsellor points out, Flemish exporters usually bring very high quality, good value-for-money products to the Hungarian market, for which it is not difficult to find buyers. “The biggest added value of our office is the local market knowledge, which helps to identify the right contact persons and take the first steps in establishing contacts. After that, it all comes naturally because excellent goods and services sell themselves easily. The major international fairs organized at Hungexpo in Budapest are an excellent way of building contacts and mapping new partners. We usually accompany companies to these fairs. From the Belgian investors' point of view, I would highlight the activities of the Belgian Business Club in Budapest, BelgaBiz. The club currently has about 50 members: representatives of Belgian companies in Hungary and Hungarian companies interested in Belgium. At least one event per month is organized by the club, which provides a very effective framework for networking and orientation. However, it is regrettable that there are so far very few Hungarian investors in Flanders. The pharmaceutical company Richter has a distribution office with 25 people there, but apart from that there are only smaller Hungarian companies with one or two people present in the region. We hope that this will change in the future and that Flanders will become a more popular investment destination for Hungarian companies.”
Contacts and partners
The FIT office in Budapest actively cooperates with chambers of commerce and industry, both at national and at county level. Szonja Bender says that “I am in a fortunate position because I spent the first half of my professional career, 11 years in total, working for the Hungarian Chamber of Commerce and Industry (MKIK) in the Budapest headquarters and as head of the Brussels representation, so I have good old contacts in these circles.” Another important group of partners are sectoral associations, innovation and industrial parks, and trade representations and agencies. “They understand and follow their particular area of the economy better than anyone else, and we can also work successfully with their members on the basis of mutual interests. During the pandemic, we organized several webinars, both for trade development and investment promotion. We have promoted Flanders to start-ups as a region with an innovative and supportive ecosystem, where Hungarian spin-offs and scale-ups looking for fast growth can find an excellent breeding ground. This was organized in cooperation with the incubators KBC start it X and Start it @K&H, a subsidiary of the Belgian bank. In the meat sector, we organized a virtual business meeting with the Belgian Meat Office in Teams – more than 80 bilateral meetings. And we recently organized a seminar with the MKIK on business opportunities in Belgium, including Flanders. Among sectoral associations, we regularly work, for example, with the Association of Hungarian Automotive Component Manufacturers (MAJOSZ) and through them with the Zalazone automotive proving ground, where we will be taking a Flemish business delegation this fall,” she highlights.
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