Facilitating bilateral business ties

The Korean Trade-Investment Promotion Agency (KOTRA) established its Budapest office back in 1987, before the change of the social and economic system in this country. Its current director talked to Diplomacy & Trade in a recent interview.

As for its aims, the organization’s name says it all. As the Director General of the office (Korea Trade Center), Kim Yongsuk tells Diplomacy Trade, their job is to collect information on the business environment in Hungary and provide Korean companies interested in the Hungarian market with the results of their research. They also inform Hungarian business organizations as to the intentions of interested Korean companies. “We organize and arrange meetings, exhibitions and other events for trade delegations coming from Korea and we also support the trips of Hungarian businesspeople to Korea.”

As for the economic environment in Hungary, the Director General sees positive signs such as the road reconstruction in Budapest and the multitude of people in shopping centers, “which suggests a growing consumption.”

Korean visitors

He reminds us that Hungary has a strategic central location in Europe, it has skilled manpower and a high level of fundamental sciences. “In mid-October, seven Korean companies came here on an exploratory visit. At the end of September, we received an ‘auto parts cluster’ business delegation of 11 companies. They had meetings to develop new business models in trade and/or investment. Koreans also visited the northeastern city of Miskolc for a business session with local companies in the ‘automobile cluster’. I hope that meetings like this will lead to the establishment of Korean factories here in Hungary or at least joint ventures with Hungarian partners,” he adds.

It is in Hungary that Korea has the best economic relations in the region, with several green-field investments not only trade. The best examples of this are Samsung and Hankook, which provide jobs for thousands of Hungarians. The Director General, who regularly talks to top managers of Korean companies operating here, stresses that for Korean businesses, Hungary is not an Eastern European country but primarily a member state of the European Union. A second consideration is that here, labor costs are less while the labor force is skilled and well-educated, “which means that labor productivity is higher here than in the other countries of East and East Central Europe, even comparable to Western Europe. All this makes it worthwhile for Korean companies to invest in Hungary.”

Bringing in more investors

Kim Yongsuk has been in Hungary for over two years. “On my arrival, my objective was to increase the volume of bilateral trade and attract more Korean companies here. A Korean pharmaceutical company was registered in Hungary just two months ago and the appearance of more Korean auto parts companies are expected to appear in this country. My target is to see at least one more multinational enterprise from Korea and ten more SMEs investing in Hungary. These developments are expected to hit the news within a year or two.”

He has travelled to many places in Hungary, especially on professional trips to get to know the Hungarian economy. “My experience is that many of the municipalities in the countryside are waiting for Korean companies in their area, offering low-cost labor, venues and development projects,” the General Director concludes.