Siemens Zrt. will implement developments worth ten billion forints in its operations in Budapest over a period of three years, and will at the same time hire 150 highly qualified technical experts at its site, Dale A. Martin, Chairman-Chief Executive Officer of Siemens Zrt. announced on Tuesday at a press conference held in Budapest.

He added that the plant of Siemens Power and Gas situated in Késmárk utca in Budapest on an area of 6 hectares manufactures turbine blades and oversized steel components for gas and steam power stations. He said that the Siemens Group employs some 3,000 workers in Hungary, and the Budapest plant is a key player of the company group’s international power generation sector. He reiterated that they have implemented projects worth more than HUF 7 billion since 2011, and by now more than 600 people work in the plant.

DownloadPhoto: Ministry of Foreign Affairs and Trade

Minister of Foreign Affairs and Trade Péter Szijjártó said that the manufacturing of new products with an extremely high added value will begin in 2018, and with the development, the plant will become one of Europe’s largest turbine blade manufacturers.

The project is also important for Hungary because, as an open economy, its development is determined to a large extent by foreign investments and the volume of exports, and the development in question is an export-oriented project which is based on ongoing innovation, he stated.

The Minister pointed out that Siemens is the first to launch a dual technical master training course at the Budapest University of Technology and Economics as a unique experiment. He further drew attention to the fact that Siemens is a German company, and the trust of German businesses is particularly important for the Hungarian national economy as they represent one quarter of the foreign working capital coming to Hungary.

In the ever keener global economic competition, technological developments must be carried out, he said. The Government therefore decided that 2017 will be a year of major tax cuts, he added, reiterating the reduction of the rate of the corporation tax to 9 per cent on a standard basis which is the lowest rate in Europe.

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The Minister of Foreign Affairs and Trade took the view that, during the course of negotiations with international businesses, they concluded that the level of the corporation tax will be one of the most important criteria for capital flows, and businesses seek a level between 7-10 per cent. Hungary with its 9 per cent corporation tax finds itself in a unique position in Europe, he said.

Mr Szijjártó told his audience that after last year’s record, there is a good chance also this year that exports, our foreign trade surplus, and investments coming to the country via the agency that is responsible for promoting investment will break yet further records. According to September data, exports in the first nine months exceeded last year’s level during the corresponding period by 3 per cent, while the foreign trade surplus was EUR 1.2 billion higher than last year, he said.

Árpád Goszták, Chief Financial Officer of the Budapest plant of Power and Gas said that as a result of the investment, they will build a new production hall with a ground space of 10 thousand square metres, and will extend the existing floor by 2,500 square metres. The construction works will begin this week, he added.

The Budapest plant is one of Siemens’ competence centres, he said. With the current enlargement, they will begin the production of a new product type, gas turbine hot section blades, which also involves the introduction of a new technology in Hungary, he added.

According to the executive, Siemens was the first to recognise that production which is merely based on the advantage of a lower wage cost cannot be successful in Hungary. Turning the plant into a competence centre also required the flexibility and creativity of the workers. The technologies brought to Hungary at the beginning of the 2000s have now been upgraded to cutting-edge world standards, he pointed out.

Based on the publicly available company data, Siemens Zrt. attained a sales revenue of HUF 89 billion in the financial year closed at 30 September 2015, after HUF 83 billion in the year before. The company’s after-tax profit amounted to HUF 3.5 billion in the business year that extended to the end of last September, compared with HUF 5.4 billion a year earlier.