Japan’s Bridge to Business in Hungary

The Budapest office of the Japan External Trade Organization (JETRO) looks back at the history of over three decades now. The office’s General Director, Yasunari Miyauchi tells Diplomacy&Trade how the organization helps widening Japanese corporate presence in Hungary and promoting trade and investment between the two countries.

The Japan External Trade Organization is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 (headquartered in Tokyo and Osaka) to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential. JETRO has 75 overseas offices in 55 countries and 49 regional offices in Japan.

The figure that probably tells the most about the successful activities of JETRO’s Hungarian office over these decades is that some 180 Japanese companies, mainly in the manufacturing sector, have invested in this country, employing more than 30,000 people since 2016. “When Japanese companies were considering direct investment in Hungary, our JETRO Budapest office provided them with support through various means like preparing a research report or sometimes briefings, holding seminars and arranging a tour for Japanese companies here,” the General Director highlights.

Comparing the costs
Regarding the inquiries by Japanese companies to JETRO Budapest, Yasunari Miyauchi says these firms sometimes wish to compare the costs here in Hungary with those in other countries in the region. “So, we are collecting information on labor costs or how much it costs if they purchase or rent space or land. If we look at the business sectors or the main business areas that Japanese firms are most interested in, it is the mainly the automotive industry. One great example is Magyar Suzuki that set up a factory here 30 years ago. That development attracted other investors to come here and establish themselves as suppliers of parts and components.”

New investors coming
He adds that recently, new companies have arrived to invest here, widening the Japanese corporate presence in Hungary. “They are mostly manufacturing underlying technology fundamental for electric vehicle (EV) batteries. One great example investing in the automotive sector, more precisely, in the electronic vehicles industry, is Nippon Paper Chemicals. They are manufacturing battery material for EVs, like thickeners for positive electrodes as they have the technology to manufacture those kinds of components. And it is not just the newcomers. Some Japanese companies that have already invested here are expanding their facilities or shifting to the EV sector.” JETRO is currently writing a variety of research reports, including daily business briefs and industry analysis reports, but plans to focus more on the EV industry.

Working with Hungarian investment promotion
When managing bilateral business relations in the different fields, the most important Hungarian partner for JETRO’s Budapest office is the Hungarian Investment Promotion Agency (HIPA) that also aims at supporting Japanese companies investing here. JETRO has also signed a Memorandum of Understanding (MOU) with the predecessor of HIPA. “We have a good relationship with HIPA, sometimes co-hosting with them seminars for Japanese companies. We have organized 13 procurement exhibitions (so-called reverse exhibitions, when Japanese companies indicated their wish list of components/parts/services procured from local suppliers) together to connect local suppliers with the Japanese manufacturing companies to enhance the productivities of each party. These events were very successful. When Japanese companies are interested in collecting information concerning investment opportunities, we sometimes introduce them to HIPA,” the General Director highlights.

Cross-border open innovation
JETRO also makes efforts to act in the other direction, that is, promoting inward investment to Japan and facilitating cooperation and collaboration. Hungarian startup companies with excellent technologies are introduced to Japanese companies in order to promote international collaborative partnerships. “We now have a business platform for the creation of cross-border open innovation to facilitate collaboration between Japanese and overseas companies – a platform we call ‘J Bridge’. It is for startups and other companies who are interested in expanding business not only domestically but internationally with Japanese companies; considering investment from Japanese companies; and/or utilizing the capabilities of Japanese companies in product development, manufacturing, sales, marketing, etc.,” he points out.
The focus of this business platform is mainly on the fields of digitalization and green economy. “Now, I believe, we have 2,000 people registered from Japan, mainly from large scale companies and universities, while the number of mainly foreign startup companies registered on that platform is 800. It's kind of a matching style system. If Hungarian startup companies register, they can search for Japanese companies and if they would like to have a business meeting, we can arrange it. Of course, in terms of foreign direct investment, if Hungarian company would like to set up their business in Japan, we can support it,” Yasunari Miyauchi says.

Scallops and sake
Another important task of JETRO is promoting the export of Japanese goods, especially those of gastronomy to Hungary, making Hungarian businesses and the public aware of Japanese products. Mentioning recent examples of such gastronomy cooperation, the General Director describes a promotion event for Japanese scallops the JETRO office hosted during Valentine's Day week. “Each restaurant used Japanese scallop for the Valentine's Day menu. The event was very well received by the guests and chefs. Many of them commented that Japanese scallops were very tender and of wonderful texture. Out of the 11 restaurants participating, three of them ordered Japanese scallops and two of them will include these on their seasonal menus.”
Early March this year, JETRO’s Budapest office held another export promotion event. “We invited eight Japanese sake breweries to Budapest in cooperation with the Japan Sake and Shochu Makers Association. We organized business meetings and tasting events attended by some 70 people. It was very successful. Several business meetings are ongoing between Hungarian buyers and Japanese breweries, and we will continue to follow up on these meetings,” he stresses.

Originally, JETRO was established as a support organization to bring Japanese products overseas. In that sense, they would like to continue to introduce excellent Japanese items to Hungary in a wide range of fields, including machinery and equipment, as well as food products.