Hungary: Pharma, food, IT and vehicles trade

| January 20, 2021 | 0 Comments
Richter Gedeon is a Hungarian pharmaceutical and biotechnology company with a strong focus on research and development. (Photo: Richter Gedeon Plc.)

Richter Gedeon is a Hungarian pharmaceutical and biotechnology company with a strong focus on research and development. (Photo: Richter Gedeon Plc.)

Hungary is one of the fastest-growing economies in the European Union. The central European country’s GDP grew by five per cent in 2019. It has one of the highest trade-to-GDP ratios in the world, at approximately 83 per cent, according to the World Bank. This indicates a robust dependence on world trade.
Hungary is a hub of talent and innovation. Just to highlight an example, medical technology and the pharmaceutical industry employ more than 48,000 people in Hungary and make up a 4.9-per-cent share of total exports. The med-tech industry makes up 1.5 per cent of GDP. Indeed, the medical technology sector has seen almost 100 years of widely acknowledged innovation, highly specialized technical development and notable exports to the global market. Several Hungarian companies have achieved international recognition with cutting-edge products and technologies. A growing number of innovative domestic SMEs as well as several international producers take advantage of Hungary’s highly favourable economic environment and productive workforce. Multinational medical device companies located in Hungary include General Electric, Hoya Lens Manufacturing, B.Braun Medical, Becton, Dickinson and Company and Coloplast. In pharma manufacturing alone, we have Teva Hungary, Glaxo SmithKline, Sanofi-Aventis and Richter.
Bilateral trade between Hungary and Canada passed the threshold of $1 billion in 2019, for the first time. On both sides, machinery-related products took the lead with $369 million in Hungarian exports and $33 million worth of exports from Canada to Hungary. Hungarian export volumes are also significant in transportation-related products at $240 million in exports of cars and car parts for the vehicle industry, while pharma-related chemical products boosted Hungarian exports by more than $107 million. Prepared food and agricultural products also play a significant role in SMEs’ exports. Hungary traditionally is a quality supplier of poultry, especially ducks and geese. In addition, Canada exports agri-food products, such as pulses, and wood pulp for the paper industry.
Canadian companies such as Linamar, Magna, Bombardier, CAE and Eclipse Automation are all investors in Hungary. Talent and knowledge are the keys to success for both countries. The famous 3D puzzle Rubik’s Cube has been an example of our creativity for more than 40 years. Canadian toy giant Spin Master has just closed the acquisition process of the London-based company that owns the brand.
Hungary’s primary objective is to encourage SMEs in Hungary and in Canada to accelerate Hungarian-Canadian trade because, at the moment, multinational or large-scale companies generate most of the trade. We encourage Canadians to take advantage of CETA, the Canada-EU free-trade agreement, most of which came into effect in September 2017. This agreement opens the Canadian public procurement market to EU companies, but Hungary’s procurement process is also open to Canadians. The procurement aspect of the agreement also helps exporters of value-added products and services.
Hungary is a land of opportunity for doing business in the EU. Our highly skilled talent base and STEM-oriented education system in the heart of the continent offers great value for Canadian companies dealing with high added-value products and services. There has been a qualitative shift from “made in Hungary” towards “invented in Hungary.”
Hungary has tailored its labour legislation to allow ample room for creating innovative workplaces based on R&D. In this context, it is important to note that Hungary offers the most competitive tax scheme in the EU. Company tax is a flat 9 per cent and personal income tax is a flat 15 per cent. The government reduced the social contribution to be paid by the employer to 18.5 per cent. These elements, combined with highly developed modern infrastructure, a competitive, quality labour force and political stability, create an attractive investment environment. Budapest is one of the largest and most developed cities in Central and Eastern Europe and offers a high-end environment and real estate solutions for businesses. Before the pandemic, the city was served by a direct flight from Toronto that operated seven days a week in peak season.
Trade commissioners at the Hungarian Embassy in Ottawa, the consulate general in Toronto, the vice-consulate in Vancouver and the Hungarian Export Promotion Agency’s regional office in Canada  are ready to help, advise and assist Canadian businesses. Our offices offer free consultancy services for Canadian investors and importers and we help companies with technology co-operation and transfers such as medical technologies, ICT and greentech. Hungary is also interested in encouraging trade in quality food products, bearing in mind that Hungary champions biological and GMO-free production.

Mária Vass-Salazar is the ambassador of Hungary. Call (613) 230-9614 or email to reach her.

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Category: Diplomatica

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Mária Vass-Salazar is the ambassador of Hungary. Call (613) 230-9614 or email to reach her.

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