“It is unacceptable that the EU has been incapable of deciding on abolishing the upper limit on state investment promotion for over one and a half months now”, Minister of Foreign Affairs and Trade Péter Szijjártó declared in Budapest at Thursday’s ceremony to present funding certificates within the framework of the competitiveness-increasing program.

Mr. Szijjártó said the EU’s inability to come to a decision was particularly disappointing in view of the fact that Brussels need only decide on affording an opportunity for member states to provide more funding out of their own budgets, and not with relation to European Union resources. “The government’s request is very simple: the 800-thousand-euro limit on the state funding of investment projects must be abolished in view of the crisis”, he added.

“During a time of crisis, a rapid decision would be particularly important, since it is now that the new global economic competition is being decided”, he stated. “Enterprises that are able to realise development projects will gain a competitive advantage, and for this reason the Hungarian government is sending the competitiveness funding to enterprises just three days after receiving the required bank paperwork. Not a single applicant will lose out on the opportunity because of a lack of funding; everyone who is able to conform to the legal requirements will be receiving a contribution from the state”, the Minister confirmed.

News about the global economy currently concerns bankruptcy and redundancies, and accordingly Mr. Szijjártó said it was especially important that Hungarian enterprises have undertaken to realise 377 billion forints (EUR 1.093 billion) in investments in recent weeks.

“The first phase of protection against the coronavirus has come to a close, the Hungarian healthcare system is prepared for a possible second wave of the epidemic, and our borders are opening in the direction of other EU member states, and accordingly, in addition to healthcare precautions, promoting investment is now the most important task”, the Minister emphasised.

A further three Hungarian investors were presented with their funding certificates at the Ministry of Foreign Affairs and Trade on Thursday. The 474-million-forint (EUR 1.37 million) investment being realised by soft drinks producer Szobi Limited can expect to receive a contribution of some 237 million forints (EUR 687 thousand) from the budget. The company was founded in 2009 and has been producing in Szob since 2012 at the location of the former fruit cordial company. According to the company’s last income statement, its net turnover increased from 1.6 billion forints (EUR 4.64 million) to 1.9 billion forints (EUR 5.5 million) from 2017 to 2018, with foreign sales approaching 170 million forints (EUR 493 thousand). According to the company’s owner and managing director, the town’s famous drinks plant would not have gone bankrupt during the 2008 crisis if the government at the time had supported Hungarian enterprises in a similar manner to the current government. Tibor Sári said the company will be purchasing new machinery within the framework of the investment project, and will also be purchasing a new building in Budapest to facilitate the distribution of goods from their facilities in Szob and Nagylőrinc. In his role as Member of Parliament of Szob, the Ministry of Human Capacities’ Parliamentary State Secretary Bence Rétvári praised the investment. He emphasised that all of the competitiveness funding programs are waiting applicants with equal opportunities, as a result of which the smallest family businesses can receive state assistance just like the large corporations. “Following the current crisis, the country will once again be able to regain momentum thanks to the performance of the Hungarian people, and not international loans”, the State Secretary said, justifying the state funding.

The investment project being realised by parts manufacturer GLB Limited exceeds 791 million forints (EUR 2.29), towards which the government is contributing 282 million forints (EUR 817 thousand) in state funding. In addition to domestic orders, the Szeged-based company is producing an increasing ratio of industrial parts for EU markets, primarily for German and Austrian customers. In 2018, the company increased its annual turnover from 1.36 billion forints (EUR 3.94 million) to 1.65 billion forints (EUR 4.78 million), while profits increased from 50 million forints to 80 million forints. Managing Director Péter Bogdán said the company will be developing its production facility with the help of the state funding, enabling it to produce with greater cost-efficiency and in higher quantities. “The company has survived the crisis and has retained all of its employees, and regards the competitiveness funding as a new opportunity”, he added. The region’s Member of Parliament László B. Nagy (Fidesz) welcomed the fact that the company is making use of every opportunity to overcome the crisis, and has also realised a change of generation in an exemplary fashion. The MP emphasised that thousands of Hungarian enterprises need to find a solution to a generational transition, otherwise their future could be closure or foreign acquisition.

Plastics processing and environmental technology company Pandan Limited is realising an investment project at a cost of almost 129 million forints (EUR 374 thousand), towards which it will be receiving 51.5 million forints (EUR 149 thousand) in state funding. The Szombathely-based company creates environmental technologies and manufactures food packaging materials using plastic waste. The company’s net turnover grew from 2.15 billion forints (EUR 6.23 million) in 2017 to 2.6 million forints (EUR 7.54 million) in 2018, during which time the volume of foreign sales increased from 764 million forints (EUR 2.21 million) to over 1 billion forints (EUR 2.9 billion), and the company’s after tax profits grew from 12.7 million forints (EUR 36,810) to almost 22 million forints (EUR 63,780). Owner and Managing Director Kálmán Kupi told the press that the company’s most important foreign markets include Germany, the Netherlands and Austria, but it also manufactures products for the Scandinavian and Southern Slavic states. “The investment project we are beginning with the help of the state funding will also result in an increase in imports”, he added. According to Member of Parliament Csaba Hende (Fidesz), unusual and previously unknown instruments must also be deployed in the interests of counterbalancing the downturn caused by the coronavirus pandemic. “People who accelerate in the bend will overtake on the straight and forge an advantage from their disadvantage”, he said, referring to the current crisis situation.

806 enterprises have applied for funding within the framework of the competitiveness-increasing program, which currently has a budget of 169 billion forints (EUR 490 million). Decisions on providing funding to 271 enterprises had been made until Thursday

(MTI/Cabinet Office of the Prime Minister)