Korean trade office offers win-win opportunity

The mission of the Korean Business Office in Budapest is helping Korean companies interested in penetrating Hungarian market and connecting Hungarian buyers interested in Korean products and/or services.

The Korean Trade-Investment Promotion Agency (KOTRA) established its Budapest office back in 1987. The Director General of the office, Jong-Choon Kim tells Diplomacy Trade that “South Korea offers to be a strong and reliable partner to Hungary as it wishes to position itself as a diversified and knowledge-based economy. The Republic of Korea has the right resources to lead innovations in technology, creativity, research and development, small and medium businesses and intellectual property rights.”

The Director General is of the view that the Korean government and private sector look forward to an era of increased co-operation and stronger economic partnerships with Hungary. He adds that “in Hungary, there are also many investors and enterprises who are keen to explore business opportunities in South Korea. It is natural that the harmonious and mutually supportive relations we share are extended to stronger bilateral trade relations.”

Indeed, bilateral trade relations are on the rise, with the volume increasing by 38.6% to USD 2,785 million in 2010. Korean exports to the Hungary grew particularly strongly last year, an increase of 40.4% to $2,385 mn. By contrast, Hungarian exports to Korea were less dynamic, with a growth rate of 31.7%, and a volume of USD 400 mn. This leaves a trade deficit of $1,985 mn for Hungary – almost 30% larger than in 2005. In 2010, Hungary was Korea's 34th largest supplier of goods and its 55th biggest customer. Thru September last year, Koreans invested about USD one billion, which puts Korea into the position of the 13th largest foreign investor in Hungary.

The interest by Korean investors is unabated. Jong-Choon Kim says Hungary's high-quality infrastructure, its productive and highly skilled labor force as well as its central geographic location are often cited as features that make Hungary an attractive destination for investment. However, he finds it necessary to add that “despite those advantages of Hungary, some businesses complain that obstacles and disincentives to investment remain, including a lack of transparency and predictability; reports of corruption, particularly in the government procurement sector; and barriers related to excessive red tape.”

The single biggest Korean investor in Hungary, in terms of capital volume, is Hankook Tire, followed by the Samsung Group, including Samsung Electronics, SDI. Other big conglomerates, like Hanwha Group, LG Group are also present and popular in Hungary. The number of Korean companies operating in Hungary exceeds 45.

Jong-Choon Kim says that “more than ever, technology and developing the skills of our people will be the thrust of our development strategy in the coming years. This will offer a wide window of opportunity for South Korea and Hungary to pool in resources, forge joint ventures and accelerate mutual investments in developing human capital. South Korea is admired worldwide for its technological innovations.

Hungary has also launched various path-breaking initiatives and created a superior infrastructure to incubate, incorporate and promote technology in all walks of life. This presents a win-win opportunity for both countries to enhance bilateral trade relations.”