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How to select your new electronics manufacturing site in Hungary
by Dr. Balazs Csorjan, investment promotion specialist
How to select your new electronics
manufacturing site in Hungary
by Dr. Balazs Csorjan, investment promotion specialist
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Hungary is a low-cost manufacturing location
inside the EU market.
Beside pharmaceutics, automotive, SSC,
tourism and food processing, electronics is
undoubtedly one of the leading branches in the
These few slides try to help you when it’s about
electronics industrial site selection.
Did you know?
Hungary has the largest (25%) share in
2013 in Eastern European electronics
production. The local suppliers, EMS and
OEM companies shape two electronics
Eastern Hungarian electronics cluster
Bosch, Electrolux, Flextronics, Samsung,
National Instruments, Jabil Curcuit, General
Electric - just some of the leading elecronics
companies which are doing business east
The location provides: 30% labour cost
discount compared to Budapest; 46% of all
Hungarian job seekers live here; 95
developed business parks; 700 kms
motorways; awards by Financial Times’ fDi
Next slide: a short company profile: General
Western Hungarian electronics cluster
Foxconn, Visteon, Sanmina-SCI,
Nokia/Microsoft, Sanyo, Valeo, Phillips - just
some of the leading electronics companies
which are doing business in the Western-
Hungarian electronics cluster, located west
Unemployment is maybe the most relevant
difference between the Eastern and
Western part of Hungary. Western Hungary
has shortages in many professions and in
many labour market segments, while
Eastern Hungary “is a human mine”. With
an example: the entire Western Hungarian
Region has a similar number of job seekers
(30k+) like a single Eastern Hungarian town,
Hajduboszormeny and its vicinity (25k).
HR: Labor costs
Not independently from unemployment,
Budapest and Western Hungary have
higher labor costs. In numbers, the average
monthly gross earnings of employees was
270 thousand HUF (approx. €900) in
Budapest, 200 thousand HUF (approx.
€670) in Western Hungary, and 180
thousand HUF (approx. €600) in Eastern
Hungary, in 2012.
In Eastern Hungarian electronics industry, a
well-trained, experienced, skilled worker
earns monthly gross 150-250k HUF and an
engineer between 300-600k HUF. These
numbers are similar than in Coastal Chinese
The Hungarian vocational education follows the
“German modell”. The so called dual education
means: vocational school students learn
practical skills at companies.
There are no relevant differences between
Western and Eastern Hungarian vocational
education, however the leading universities are
in Eastern Hungary (Miskolc, Debrecen,
Foreign language education at vocational level
is an issue, but there are planned projects for
low-level, highly industry-specific and large-
scale tech language education.
The new Hungarian Labor Code has 4 main
benefits for companies:
● it provides more simple termination of
● more flexible rules for compulsory
● more flexible working time,
● and finally: more overtime.
In Central and Eastern Europe, there are approx.
1,000 industrial parks, and 20% of it are in Hungary.
The number of industrial brown field sites can be
estimated for more thousands, however be careful
with these old industrial facilities: there can be
relevant environmental issues thanks to the
communistic heavy industrial track record.
Industrial real estate markets are liberalized in
Hungary, you can get a property quickly (but hire a
Real estate costs
Industrial land average sales prices are between 20-30€ per sq.meter in larger cities, and under 20€ in smaller
towns. 10€ per sq.meter can be regarded a very good deal, however some municipailities offer a free of charge
Manufacturing rental market is small outside Budapest, but the average rental fees are between 2.5 and 5 € per
sq.meter per month.
The Hungarian electricity market is highly regulated by the EU. The EU has a competitive energy
market (theoretically), separating the grid developers and energy providers. (On-site grid
development is managed by business parks). As a key account, you can achieve competitive energy
EU energy price statistics can be checked here >>
Developed infrastructure makes Central-
and Eastern Europe more attractive location
than other emerging countries of the world.
Hungary has 1600 kms (approx. 1000 miles)
motorways network, far the largest one in
The Hungarian motorway system is
Budapest-centric, all the ways are going to
the capital city.
There are 3 international airports in Hungary.
Budapest Airport: the 2nd largest hub in Eastern
Europe, more dozen daily flights inside Europe.
Debrecen International Airport (Eastern
Hungary) has a strong air cargo focus;
passenger flights to Western Europe and to
The Fly Balaton Airport in the Western corner of
Lake Balaton has a strong low-cost air flight
Grants by the
When it’s about industrial site selection, grants
can be the cherry on the cake. I don’t suggest to
make a decision based on grants only, but why
shouldn’t calculate with free money when some
governments provide it?
The main topics when it’s about grants for
manufacturing: job creation subsidies, training
subsidies and cash grants.
Over €10M investment you can achieve VIP
incentives from the Hungarian government.
You cannot imagine the creativity of Eastern European
mayors when it’s about investment promotion. Some
offers a one-year entrance for all your future staff to
the matches of local basketball team (“it will support
your recruitment”). Others provide international school
development projects and family assistance to your
expat manager families.
The bravest local governments offer special deals. E.
g. the municipality of Hajduboszormeny, Hungary,
provides a free of charge industrial property for 50 new
jobs + a dedicated vice mayor to manage your
investment within the Hungarian public administration.
By the way, the location is inside the top10 best cost
effective regions of Europe (ranked by Financial
Times’ fDi Magazine), so beside basketball tickets you
can gain pretty good deals on municipal level, too.
The strongest organization is IVSZ, the
Association of IT, Telecom and Electronics
Companies. Its members cover almost the entire
industry, and has working groups for education
or EU funding etc.
The networking events of IVSZ can be a perfect
first step in the Hungarian market.
Manufacturing Hungary Blog is an information source about the manufacturing
topics in Hungary and Eastern Europe. Our goal is to support site selection
team’s job, providing useful information.
Dr. Balazs Csorjan, investment promotion specialist, the former regional
director of Hungarian governmental investment promotion agency. Dr. Csorjan
has taken part in 300+ site selection projects - he knows your questions.
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thnx a lot!