7days, 2004. január 23

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INTERNAL AFFAIRS19.01.2004 -Suggestions for austerity measures

FOREIGN AFFAIRS20.01.2004 -Not enough graduated people22.01.2004 -Strasbourg also not keen on large twin deficit

MACROECONOMY19.01.2004 -Better industrial production figures

- Inflation reaching 4.7 percent in 2003

- We are good in Big Mac21.01.2004 -Further companies getting Smart grants- Real wages increased by ten percent

22.01.2004 -Fitch warns Hungary- MNB gave up its exchange rate target

BANK19.01.2004 -Autobank to enter the Hungarian market?20.01.2004 -Budapest Bank shares dematerialised

- Increasing at Volksbank21.01.2004 -OTP expecting another profit record22.01.2004 -New funds from K&H23.01.2004 -Autobank would operate in a franchise system

INSURANCE

19.01.2004 -ARAG Insurance to leave HungaryHEAVY INDUSTRY21.01.2004 -Additional Suzuki production at Rába

CHEMICAL INDUSTRY19.01.2004 -Egis pays HUF 120 in dividends21.01.2004 -Egis and Richter to increase Hungaropharma stake22.01.2004 -Graboplast to increase its capacity

ENERGY INDUSTRY20.01.2004 -Mol selling minority interests in Égáz and Dégáz22.01.2004 -Mol still in the running in the Czech Republic

BUILDING INDUSTRY21.01.2004 -Construction industry still in boom

ELECTRONICS

22.01.2004 -Delphi carrying out developments in Hungary23.01.2004 -Foundation stone of Electrolux plant in Nyíregyháza laidTELECOMMUNICATION20.01.2004 -Vodafone winning a court case against Matáv

FOOD INDUSTRY21.01.2004 -Parmalat supplying continuously

- US suspending Hungarian meat importsAGRICULTURE20.01.2004 -Application for state land lease22.01.2004 -Tokaj Kereskedőház up for grabs

TRADE, FAIRS19.01.2004 -The Tesco in Komló will be completed by autumn

- Ford and Skoda gaining ground

- Price raise expected in the car market- Wallis Motor to decrease its prices

20.01.2004 -Nearly 21 percent expansion in passenger-car market22.01.2004 -Communications manager at Praktiker

- Leasing companies to lose on large cars23.01.2004 -Avis opening regional centre in Budapest

- Both Mercedes and Mazda reduced prices- Summit motors bettering its figures

TRAFFIC, TRANSPORT22.01.2004 -Skoglund to found forwarding company

INVESTMENT, DEVELOPMENT19.01.2004 -Óbuda Gate is sold20.01.2004 -Baseball stadium in Budapest?

- Construction sector waiting for metro tenders- Hunguard develops- Lidl in swing- TriGránit in the running for Mahart- University colleges from private investments

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21.01.2004 -Dataplex buys its data centre- Irish investors in Sármellék?- Pioneer expanding in Szarvas- Helena house fit for occupation

22.01.2004 -After VAT on plot of land, now construction material makes houses moreexpensive

- New market place at Garay square23.01.2004 -Nokia to invest over EUR 50 million in phone factory in Komárom

CULTURE19.01.2004 -Free Sting concert in BudapestMEDIA21.01.2004 -Papers will become more expensive

OTHER22.01.2004 -Baumgartner to start in Forma 1

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INTERNAL AFFAIRS - 19.01.2004Suggestions for austerity measuresThe government is not planning tax hikes to offset the ballooning general government deficit -Hungarian finance minister-designate Tibor Draskovics announced. Should it be forced to do so, thenit can be carried out mainly through the increase of consumption-related taxes, he added. Accordingto tax consultants, a modification hitting the general public would be against the legal regulations andthe constitution. However, there is nothing in the way of curbing development concessions. There is

information that the tax hike on tobacco products and spirits can be brought forward. Also possible isthe supervision of the registration tax, the termination of the tax-exempt status of profits realised frominvestments on the stock exchange or the introduction of the interest tax. The Finance Ministry hasinitiated a forum where it was waiting for ideas on where to have savings. Daily Népszabadság detailsthe ideas coming to the popular initiative and carries an interview with the new Finance Minister designate. He described a decision on when to introduce the euro as a matter of national concern,adding that the supervision of the 2008 date of entering the eurozone is necessary so that the goal isa real one and attainable at the same time. Draskovics is of the opinion that since the euro is anational matter, it needs a total consensus from all parts of the society. (NSZ, 17 Jan, p 1 and 5,Nszab, 17 Jan, p 17 and 18)

FOREIGN AFFAIRS, EUROPEAN UNION - 20.01.2004

Not enough graduated peopleIn the Hungarian active age group from one hundred persons only 14 has upper level qualification,while in EU member states this rate is 27 percent – stated Eurostat. Thereby Hungary can claim thefifth worst result its own among member states and member candidates. Most, 40 percent, graduatedpeople live in Finland. (VG p3)

FOREIGN AFFAIRS, EUROPEAN UNION - 22.01.2004Strasbourg also not keen on large twin deficitThe foreign committee of the European Parliament has started the debate on the draft reportyesterday which would call on Hungary to decrease its excessive general government deficit andtrade deficit. The document was presented by Elmar Brok. The report analyses in details tasks definedin last November’s country report for the agricultural sector. (VG, p 1 and 3)

MACROECONOMY - 19.01.2004Better industrial production figuresHungary's industrial output rose by 6.8 percent year-on-year in November - the Central StatisticalOffice (KSH) reported. The working-day adjusted increase was 9.7 percent. In January-November,industrial output was 5.5 percent higher than in the same period of 2002. Seasonally and working day-adjusted figures showed a 1.8 percent month-on-month rise in November. KSH data show exports asthe main driving force behind industrial output growth: industrial exports expanded by 9.5 percent inJanuary-November. (NSZ, 17 Jan, p 5, MH, 17-18 Jan, p 9, MN, 17 Jan, p 11)

Inflation reaching 4.7 percent in 2003 Annual average inflation was 4.7 percent last year, down from 5.3 percent in 2002 - the CentralStatistical Office (KSH) announced. Consumer prices in December were up by 0.2 percent from

November and stood 5.7 percent higher than a year earlier. Food prices were unchanged inDecember, household energy prices and clothing prices rose at an above-average monthly rate.Consumer durable prices actually fell year-on-year, whilst foodstuff and fuel prices rose at a belowaverage rate from December 2002 while services grew 6.7 percent in prices in the last twelve months.Core inflation, where seasonal changes of food and energy prices are excluded, increased 4.9percent. Projections for this year call for an inflation rate exceeding 6 percent, with London-basedanalysts expecting a 7 percent monthly rate during the year. In parallel with the announcement of theinflation figures, forint started strengthening on Friday with euro trading at HUF 266. (Nszab, 17 Jan, p17, MH, 17-18 Jan, p 11, MN, 17 Jan, p 11, NSZ; 17 jan, p 9)

We are good in Big Mac Among countries accessing the EU in May, proportionally the most expensive burger is available in

Hungary, which costs 2.38 dollars – reveals the survey of The Economist. The basis of the weekly‘sBig Mac index is the price of the sandwich that is sold worldwide. The reference is the one available inthe United States, the value of which is 2.8 dollars. The cheapest burger is the Chinese, the price of which is 1.23 dollars and the most expensive one is the Swiss sandwich for 5.11 dollars. TheHungarian Big Mac is at the 13th position in the world ranking. (Nszab. Jan. 17th p17, MH Jan. 17-18th p11, MN Jan. 17th p12)

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MACROECONOMY - 21.01.2004

Further companies getting Smart grantsMost recently, a total of 64 companies have been awarded grants from Hungary’s investmentincentive schemes SMART-1 and SMART-2. As a result of the grants, concerned companies couldcarry out investments to the tune of HUF 47 billion, whilst creating 3,200 jobs. The applications were judged in a point-based system with the committee taking into account excess exports andcontractor’s sales revenue, added employment and county allocation (investments in the five most

underdeveloped counties of the country were given more points). The limit value for grants to beawarded was 42.2 points on a 100-point scale, whilst the average number of winners reached 59.2points. The largest points were given to Nokia, planning to add four new production lines to itsKomárom plant. Like the Finnish telecommunication giant, also Belden-Duna Kábel Kft., DaewooMagyar Gördülőcsapágy Kft., Danone Tejtermékgyártó és Forgalmazó Kft., Grabofloor PadlógyártóKft., Masterfoods Magyarország Gyártó Kft., Magyar Suzuki Rt., Philips Industries Magyarország Kft.,Siemens Transzformátor Kft., Hunplast Elektonikai Kft., Transelektro Ganz Röck and Austrianmanufacturer of plastic packaging materials Wolf-Plastik Kft. were all granted the maximum HUF 100million support. The latter one would like to use the grant for its HUF 780 million capacity-increasinginvestment in its Fertőszentmiklós plant. (NSZ, p 10, NG, p 4)

Real wages increased by ten percent

The gross level of wages in the public sphere exceeded previous year’s figure by 9.8 percent inNovember last year, however a value of only 4.7 percent was registered by statistics in October. Inline with this wage dynamics in the corporate sector decreased from the 9.7 percent measured inOctober to 9.2 percent, as a result of this gross nominal earned income increased by 12.5 percent toHUF 133 700 in the first 11 months of last year, while net wages increased by 15.2 percent comparedto the basis value. Based on this figures real wages between January and November on year/year basis increased by 10.1 percent, while the consumption price index increased by 4.6 percent. (NG p3,VG p4)

MACROECONOMY - 22.01.2004

Fitch warns HungaryIn a country report published in London on Wednesday, Fitch Ratings warned that Hungary risks a

downgrade of its credit ratings unless it makes more progress in its programme to cut the deficit.Hungary’s currency risk rating has already been changed to negative by the credit rating giant,meaning that in the next step it can downgrade Hungary’s current A- rating. (Nszab, p 13)

MNB gave up its exchange rate targetZsigmond Járai said in his statement given to Reuters and at a conference yesterday that in the futureMNB (National Bank of Hungary) will unambiguously concentrate on achieving the inflation target. Theissuing bank‘s president thinks that the set target can be achieved by both a weaker exchange rateand stronger interests. According to analysts, this means that the issuing bank and the governmentgave up following the exchange rate target for the sake of the inflation target, since yesterday theforint was in the target of speculative attacks at several times. He said that the decision about the timeof introducing the euro is in the hands of the government, and the issuing bank itself will do its best to

be able to keep the target date set by the cabinet and will meet the requirements that partly depend onthe central bank. The market evaluated the statement of Járai favourably and also considered theachievement of low inflation the most necessary task. According to experts this can only beimplemented with harmonised exchange rate and interest policies. It can be stated based on what wassaid by the issuing bank‘s president, that in the near future the issuing bank will not reduce the interestrate. MNB will presumably wait and decides about necessary steps depending on the result of budgetary restrictions. The current statement of the issuing bank‘s president points into a positivedirection compared to last year‘s inconsistent communication, but it would be early to talk aboutfinancial balance. This was said by Lars Christensen, analyst of Danske Bank, according to whomamong countries intending to access quick fiscal adjustments have to be made in Hungary, Polandand the Czech Republic in order to avoid financial crisis. Accession to the EU draws down extraexpenses, therefore the deficit would become huge under the current fiscal course. If governments will

not take the necessary steps until then, they could be forced to apply painful measures. (NG p1, 3,MH p9, NSZ p5)

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BANK - 19.01.2004

Autobank to enter the Hungarian market? According to Austrian press information, Autobank plans to enter the Hungarian market. The vehiclefinancing company has been part of the Salzer group since the end of the last year and has beengoing through a reorganisation recently. It plans to post an EUR 750 thousand profit for this year. (VG,p 14)

BANK - 20.01.2004Budapest Bank shares dematerialisedDematerialisation of Budapest Bank shares is completed. The liquidation of the counter value of non-submitted, annulled papers takes places as of today. American GE Capital, the principal owner of thebank, offered a purchase money of 134 percent at the beginning of 2001, than six months later apurchase money of 180 percent in the framework of a public offer for BB’s papers. This was acceptedby a determinant percentage of the investment club members. (NG p12)

Increasing at Volksbank According to preliminary data balance-sheet total of Magyarországi Volksbank (Hungarian VolksbankCo.) exceeded HUF 153 billion at the end of last year. This exceeds last year’s figure by 34 percent.Loans outstanding increased by 46 percent over HUF 110 billion and sum total of deposits grew by 24

percent to HUF 72 billion. The branch network expanded by seven new subsidiary banks, thecompany acquired two branch offices from BNP-Paribas Hungária Bank. (VG p13)

BANK - 21.01.2004

OTP expecting another profit recordIn spite of lower than in earlier quarters figures of the last three months, National Savings Bank OTPRt. is counting on breaking further records. Vice-chairman Zoltán Spéder Said that OTP Bank'sunaudited pre-tax profit could exceed the HUF 70 billion plan by 15 percent, whilst being 40 percentlarger than the figure posted a year earlier. According to economic daily Napi Gazdaság, consolidatedresults can reach HUF 85 billion. Figures of the credit institution were undermined by several factors,e.g. the revaluation of the mortgage stock, building reserves, depreciation in relation to the DSK case,that is why the pace of growth slowed down. On the positive side is the fact that after terminating the

working capital loan, the bank’s exposure to poultry processing company Hajdú-Bét has finished.( NG, p 11 and 12)

BANK - 22.01.2004

New funds from K&HFund manager K+H Alapkezelő Rt is to introduce four new products into its fund group. Three-year,forint-based closed-ended "Fix Plusz Extra" and two-year euro-based "Euro Fix" are both giving a fixyield. Both funds are open for subscription from January 28, 2004 to February 26, 2004, but can beclosed earlier. The tow other products are a Belgian dollar-based and an euro-based corporate bondfund. These are well-known and successful products of the Belgian KBC group, having posted a yieldof 6.8 percent and 6.5 percent in the last three years, respectively. Hungarian financial marketwatchdog PSZÁF has not given the green light for the Belgian fund yet, their start is set to come in

February. Plans call for new members of the KBC fund group also to appear in the K&H supply. (VG,p 11, NG, p 12, Nszab, p 13)

BANK - 23.01.2004

Autobank would operate in a franchise system Autobank, which plans expansion in Hungary would not be active in the domestic market individually,but in co-operation with a local financing firm. The Austrian company has up to now negotiated withone leasing firm, but for the time being no agreement has been made. If conciliations will besuccessful, then Autobank could start its activity in three months. According to plans, the firm wouldoperate in a franchise system; initially they would target the purchasers of agricultural machines andlater on they would enter into the financing of construction industry machines, but it is not excludedthat in the future they would provide financial help for the purchase of smaller passenger cars. Another

news related to car financing is that due to increasing sales, Volvo‘s financing firm founded itssubsidiary in the Czech Republic. In addition to financial and operational leasing, the company wouldbe engaged in insurance as well, and later on financing would be extended to the Renault Trucksbrand as well. Besides many factories Volvo also sees serious possibilities in Eastern Europeanmarkets, but it is not known yet, whether the financing firm plans to enter into the Hungarian market.(VG p18)

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INSURANCE - 19.01.2004

ARAG Insurance to leave HungaryLegal insurance company ARAG Jogvédelmi Biztosító, a subsidiary of the Duesseldorf-based ARAGInternational AG, majority owned by German Fassbander family, is to leave Hungary and the CzechRepublic. ARAG is of the opinion that its Central European investment would not recoup fast enough.This is the first occasion after the changing of the regime that an insurance company in foreign handshas left Hungary. As daily Népszabadság has learnt, executives of ARAG Jogvédelmi Biztosító Rt. are

going to start negotiations on the company‘s dissolution of business with Hungarian financial marketwatchdog PSZÁF. The procedure is set to take around half year. In the meantime, the insurancecompany is carrying out its activities normally, however, there is still no decision as to what willhappen to the clientele. ARAG has been selling its legal insurance policies in Hungary, formerlyunprecedented in the country, for two and a half years. It covers legal advice in cases following car accidents and in legal disputes in relation to flats, working places or family matters, together withfinancial help for the necessary funds. It boasts 4,000 clients and insures 150,000 sportsmen. For theyear of 2003, it expects to have HUF 60 million in premiums and a loss of HUF 150 million. Althoughthe insurance concern, posting an almost EUR 1.5 billion annual revenue, could operate its Centraland Eastern European units as branches after the impending European Union accession, informationhas it that it does not want to invest any more into the region. Experts are of the opinion that should ARAG not terminate contract with its clients, but rather transfer them to other insurance companies,

then the „inherent” could be either Európa or Union Insurance. (Nszab, p 13)

HEAVY INDUSTRY - 21.01.2004

Additional Suzuki production at Rába As of 2005 Rába Holding will supply components for Suzuki’s new model in the value of HUF 2.5billion. The seat components will be produced in Mór. In 2001 Rába manufactured for the factory inEsztergom in the value of HUF 7 billion, but this turnover decreased to HUF 4 billion last year. As aresult of the new contract the amount of Suzuki orders can raise above HUF 6 billion. Last year in thefirst three quarters Rába achieved taxed losses of HUF 4.5 billion, while the net revenue decreased by24 percent to HUF 21.8 billion. According to market experts the company closes last year with recordlosses, but mainly owing to the army tender, this year it can decrease significantly and next year profitis expected. (VG p13, NG p11, 12)

CHEMICAL INDUSTRY - 19.01.2004

Egis pays HUF 120 in dividendsThis year Egis pays 12 percent, HUF 120 in dividends. The company will hold its ordinary annualgeneral assembly on January 30th. The company closed the previous business year that finished atthe end of September with a taxed profit of HUF 5.7 billion. From this they will pay HUF 934 million toshareholders. (MH Jan. 17-18th p12)


Egis and Richter to increase Hungaropharma stakePharmaceuticals companies Egis and Richter both are bidding as part of a syndicate for a 25 percentplus one vote stake in the drug wholesaling firm Hungaropharma. Both companies as are parts of an

investment consortium taking part in the privatisation. The date for submitting bids was January 19.State Privatisation and Holding Company ÁPV Rt. said in December that the minimum accepted bid isHUF 2.03 billion for the 25pc (plus one vote) share package which has a face value of HUF 1.50billion. ÁPV holds 15 percent plus one vote in Hungaropharma, and equity investor Forrás has a stakeof 10 percent in the firm. Richter and Egis, together with a third Hungarian drug company Béres Rtand Magyar Gyógyszer Rt. are members of a consortium which holds 72 percent of the drugwholesaler. (VG, p 14, NG, p 11)


Graboplast to increase its capacityGraboplast won a subsidy in a value of HUF 100 million on Smart application. The company willspend this grant on increasing the capacity of its flooring-producing plant in Tatabánya. Theinvestment costs of the project launched in December last year added up to HUF 1.5 billion. Owing tothe new machinery the plant’s production will improve to 18 million square metres a year. The number of employees increased from 140 to 170 workers. After last year’s operating income of approximatelyone billion forints Graboplast group expects a sales revenues of 21 billion forints and a 50 percenthigher profit from operation this year. (VG p8)

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ENERGY INDUSTRY - 20.01.2004

Mol selling minority interests in Égáz and DégázOil and gas company Mol has sold its 35.46 percent holding in regional gas distributor Égáz Rt and its27.18 percent stake in peer Dégáz Rt to Gaz de France as a further step in its divestiture strategy.The combined value of the interests is HUF 11.63 billion at book value, while the purchase price isHUF 11.75 billion. Payment can take place since the Hungarian Energy Office (Magyar EnergiaHivatal) has approved the transaction. The buyer has planned to merge the two regional distributorsyears ago, then Mol prevented it from taking place as a minority shareholder. (VG, p 13, NG, p 11)

ENERGY INDUSTRY - 22.01.2004

Mol still in the running in the Czech RepublicHungarian oil and gas giant Mol has made it to the second round of the privatisation of Czech oilcompany Unipetrol together with PKN Orlen and Shell. The Czech government has consideredstrategic implications when selecting between the bidders, however, in the second round price will thedecisive factor, they said. According to unofficial reports, Shell has bid CZK 11-13 billion, PKN CZK 9-19 billion and MOL CZK 7-9 billion for a 63 percent stake. The privatisation committee is set to make asuggestion on the winner at the end of April. In the meantime, Reuters announced that Russian Lukoilis going to take part as a consortium in the Petrol privatisation. Also in contention in Romania are Mol,OMV, Occidental Oil and Gas, PKN Orlen, Gazprom, Hellenic Petroleum and Glencore. (VG, p 9)

BUILDING INDUSTRY - 21.01.2004

Construction industry still in boom According to the index clarified by working days, the output volume of construction industry grew by5.9 percent in November last year. The expansion based on unadjusted index was 4.4 percent. Thecorrected index of October overmatched November’s figure by 1 percent, however the figure of thefirst 11 months exceeded basis by 0.1. The volume of contracts players of the industry were enteredinto was 0.2 percent higher in the months under review than a year before. Companies received 6.7percent more orders aiming building construction, on other hand they received 6.6 percent less ordersrelated to other purposes, as a result of this, the volume of contract portfolio at the end of the monthdecreased by 2.6 percent compared to basis data. (NG p4)

ELECTRONICS - 22.01.2004Delphi carrying out developments in HungaryHungarian Delphi subsidiary Delphi-Calsonic Magyarország Kft. is not hit by the parent company’sstaff reduction of 8,000 worldwide. There are capacity expanding developments going on in theHungarian headquarters in Balassagyarmat and in parallel, the number of employees is going to beincreased, too. The plant has a capacity of 1 million units annually, to increase to 1.4 million by thesummer. A total of USD 5 million is to be earmarked for the development project. (VG, p 6)

ELECTRONICS - 23.01.2004

Foundation stone of Electrolux plant in Nyíregyháza laidThe Swedish Electrolux company will invest EUR 65 million in constructing a refrigerator factory inNyíregyháza. The foundation stone of the plant was laid yesterday. The factory, scheduled to startoperation in a year, will employ 600 workers and raise its output to 560,000 fridges a year. With theinauguration of the new plant, the Swedish white goods producer, posting a Swedish krona 133.2billion sales revenue two years ago, will have its largest fridge and freezer production plant inHungary. A source from Electrolux said that Hungary has favourable conditions when it comes to cost,quality and suppliers, that is why they have decided to carry out the development in the country. (NG,p 4, VG, p 16)

TELECOMMUNICATION - 20.01.2004

Vodafone winning a court case against MatávHungarian telco Matáv must pay HUF 155 million in damages to Vodafone Magyarország Rt under anunappealable Budapest court decision made yesterday. Vodafone initiated the court proceedings on

the claim that Matáv breached a 1999 contract when it failed to bill or collect from local fixed-lineservice providers the mobile termination fees set by Vodafone. Matáv will decide on further legal stepsonce it has all the documentation of the case and plans to make concerned local concessioncompanies pay the compensation sum. (VG, p 7)

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FOOD INDUSTRY - 21.01.2004

Parmalat supplying continuouslyHungarian subsidiary of Italian dairy giant Parmalat is meeting its supplying obligations and its activityis not affected by the case surrounding its parent company. The Székesfehérvár-based Hungariansubsidiary of the Milan-headquartered concern is supplying mainly milk, yoghurts and yoghurt drinksand is meeting its deadlines with store chains Metro, Tesco and Auchan. Daily Magyar Hírlap haslearnt that the company managed to agree with Tetra Pak to supply it with packaging materialalthough it can not pay for that. In the meantime, the Parmalat case is getting more and morecomplicated. Bank of America announced yesterday that the dairy company had never had a USD 7.7billion account with the credit institution. Up to now, a total of 25,00 small investors has turned to theMilan Court of Attorney and thousands of e-mails have been sent in the case. Loss in Parmalat bookshas reached EUR 13 billion. Several members of the case have been arrested, among them FrancoGorreri, the Chairman of the Monde Parma Bank. (VG, p 11)

US suspending Hungarian meat importsThe United States Department of Agriculture (USDA) suspended Hungarian meat imports on theJanuary 13, as an investigation in Hungary in the autumn of last year found that some facilities werenot in line with US animal and food safety standards - Hungarian Ambassador to the USA AndrásSimonyi said, thus confirming the information of daily Népszabadság.The Food Safety and Inspection

Service of the Department of Agriculture (FSIS) examined seven slaughterhouses and processingplants in Hungary which hold export licences from US authorities and as a result of the findings, tookHungary off the list of countries from which meat product imports are welcome. (Sources at the Agricultural and Rural Development Ministry (FVM) did not say anything on the matter, and kept ontelling only that they are in negotiations with the American party and an official announcement wasexpected by the end of the week.) Mr. Simonyi said that the ban is temporary, as once Hungary isable to meet US standards - which are stricter than those of the European Union - it will be put backon the list, giving it back the right to import meat products to the United States. The move will affectHungary's meat exports to the US, worth an annual USD 5-6 million, mainly made up of processedpork (salami, packaged ham) – Simonyi added. The Association of Hungarian Meat Producers(Magyar Húsipari Szövetség) does not understand why the whole meat industry is penalised throughthe measure, within it also companies exporting products for decades without any problems. The Association highlights that only some plants did not meet American requirements and goes on to saythat it is rather unlikely that the European Union would make a similar decision, since all companiestransporting their products to the united market are meeting all described requirements. Experts formthe meat sector, however, are of the opinion that there were warning signs earlier, since conditions of a safe and quality food processing are not ensured in the whole production chain and there is a riskthat the European Union will make use of the protective clauses, that is, the united market would beunited only on the way going into it, whilst border checking for Hungarian foodstuffs would remain inplace. Also quoted in the newspaper is the General Manager of Kométa Kft., a firm taking part in thechecking process, who says that last October when the American experts carried out the checks at hisfirm, they had found a false steel product in the chopping plant and they though it could put the qualityof the end-product in doubt. That is why the United States decided to suspend Kométa’s export rights

to the country temporarily. Although the problem was fixed within a week, the restrictive measure isstill effective. (Kométa, however, was not hit by the suspension, since it does not export its productsdirectly to the United States.) Effected by the American ban are Pick Rt. and Pápai Hús Rt., although American experts have not found any malfunctions at these companies. Hardest hit will be the latter one, since it has transported a significant amount of goods to the United States before the import banwas initiated. A further problem is that the ban applies to Italian exporters producing Parma ham madefrom Hungarian raw material. This information has not been confirmed officially, what is for sure is thatmore than 10,000 tons of raw materials from Hungary find their way to the Italian plants annually. So itcan happen that all the raw materials would stay on the Hungarian market, thus further decreasingalready low prices. Also not favourable for Hungarian firms is the fact that countries of the Far Easttake the USDA checking as the base, so the worst scenario calls for Hungarian meat exports directedto Far Eastern markets also declining. (MH, p 2, Nszab, p 13,. NG, p 1 and 3)

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AGRICULTURE - 20.01.2004

Application for state land leaseNational Land Fund (Nemzeti Földalap Szervezet (NFA)) is set to lease state lands for which earlier contracts have expired or have been terminated. The majority of arable lands bought under the landfor life rent program will also be leased. First to start the program is Somogy county and the Fund isaiming to have a contract for at least 50 ha with one applicant. In the 100 point leasing system, theleasing fee offered, the sum of it being at least HUF 500 per one golden crown, will translate into 30points. The applicant may have leasing rights for the state-owned land for a period of between 5 and10 years. Foreigners may also take part in the tenders, but local Hungarian farmers and familyestablishments are favoured in many respects. The preparation of the bidding process is still in theearly stages in other counties with those interested having the opportunity to get useful informationunder www.nfa.hu. (Nszab, p 1)

AGRICULTURE - 22.01.2004

Tokaj Kereskedőház up for grabsTrading company Tokaj Kereskedőház Rt will most probably privatised till 1 May – Index.hu writes,quoting Hungarian Press Agency MTI. Current employees, members of the management andsuppliers, could buy 51 percent of shares. After the sale, the company will continue to be anintegrator. To this end, it will be responsible for the professional management of 3,000 wine and grapeproducers, the purchase of grapes at a a fair rate and the payment till the end of the year. (NG, p 4)

TRADE, FAIRS - 19.01.2004

The Tesco in Komló will be completed by autumnLast week the sale and purchase agreement between the municipality of Komló and Tesco Global Áruházak Rt. (Tesco Global Stores Co.) was signed, thus the supermarket will open its gates this year already. The construction itself will last 4-4.5 months and during that not only the supermarket will becompleted but the parking lot for 250 cars and the country‘s first Tesco gas station as well. (DunántúliNapló, Jan. 15th p4)

TRADE, FAIRS, CAR - 19.01.2004

Ford and Skoda gaining groundHungarian Car Importers' Association (Magyar Gépjárműimportőrök Egyesülete (MGE)) is to publishlast year’s new car sales today. According to preliminary calculations, 2003 has seen the sale of around 205,000-210,00 new cars, translating into a 20 percent annual expansion. Brand importersannounced that Suzuki held on to its first position with around 40,000 cars sold. The second placegoes to Opel with around 26,000 cars sold, whilst Renault got the third place, selling 20,000 cars lastyear. Skoda sold 15,600 and Volkswagen 14,800 in 2003. When it comes to Peugeot, Ford andToyota, 14,500, 13,100 and more tan 12,000 were sold, respectively. The largest expansion was inthe Ford market, where 25 percent more cars were sold than a year ago, but Toyota’s 21 percent andSkoda’s 20 percent increase in the number of cars sold is also a very good result, bearing in mind thatcar manufacturers in the first three places could increase their sales by a “mere” 9-10 percent. WallisMotor accounted for a 15 percent market share with 102 Minis and 801 BMWs sold. Citroen sold 14

more cars at 12,000, whilst Daewoo had 11,000 of its models sold last year. Mitsubishi was chosen by2,659 customers, translating into a 9 percent expansion on the previous year. The Hungarian importer of the Japanese brand is expecting a serious increase on the back of the introduction of new modelsthis year. As for the forecasts for this year, dealers are quite careful. The main reasons for it are theexact extent of price hikes carried out by exporters, the unknown effects of the introduction of theregistration tax and the uncertain rate of the Hungarian forint. János Eppel, General Manager of Porsche Hungária would be satisfied with similar sales figures as last year’s, that is, 40-41 models,whilst sales manager of Opel Károly Wolf and General Manager of Ford Motor Hungária are bothcounting on larger turnover, with larger figures of 6-7 and 10 percent not excluded. (NG, p 1 and 4)

Price raise expected in the car marketIn the category of small cars 15 percent price raise is expected after the accession to the eU due tothe car market price harmonisation – stated Imre Ferró, Volkswagen brand manager of PorscheHungaria Kft. In Hungary half of sold new cars are in the small category. The lag of prices behind theEU level does not reach 15 percent in the larger categories. Last year the brand dealerships of Volkswagen sold 15.4 thousand cars with an annual growth of 18.5 percent. (MH Jan. 17-18th p10,MN Jan. 17th p13)

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Wallis Motor to decrease its pricesWallis Motor Kft. is to decrease prices of new BMW and Mini models by 5-25 percent on the back of the introduction of the registration tax. Chief sales manager Attila Németh said that the price of modelswill go down to a different extent, with Compact 316 ti BMW cheaper by HUF 0.73 million and 760 Li,by ten times as large, namely by HUF 7.34 million. (NG, p 4)


Nearly 21 percent expansion in passenger-car marketMagyar Gépjárműimportőrök Egyesülete –MGE (Association of Hungarian Vehicle Importers)published the official sales information of last year. Based on these data there were altogether 208441passenger cars and cross-country vehicles sold in 2003, which exceeds 2002’s figures by 20.9percent. The fist place of the expansion ranking list is seized by Porsche: after the 19 cars sold in theyear before last year, there were 60 Porsches sold last year, which is an expansion of 216 percent.The most significant part of sales arose from selling Cayenne cross-country vehicles. Companiesselling South Korean brands increased their sales revenues significantly: sales figures increased asfollows: Kia by 171 percent, to 821 pieces, Hyundai by 93 percent, to 1918 pieces, Daewoo by 50percent, to 11579 pieces. After last year’s 1259 pieces, Mazda sold 2016 cars. Alfa Romeo, Chrysler,Land Rover, Rover, Subaru, Tata and Volvo reported decreasing figures. The worst index is posted byTata, they sold 12 vehicles last year, which is 63.6 percent less than a year before. There is no

change on top of the sales ranking list Suzuki, Opel and Renault are to finf on the first three places.Due to its increasing sales figures Skoda strengthened its fourth position achieved last year. Skoda isfollowed by Volkswagen and Peugeot. As opposed to passenger car’s market, there was a decrees inthe market of small utility vehicles. The average 14.3 percent drop can be mainly explained by the factthat the possibility of VAT revendication in case of 5 seated small utility vehicles is terminated.However three brands could increase its sales figures: Skoda achieved an increased of 214.6, Kia 52percent, while Mitsubishi 10.6 percent. Due to this outstanding performance the Czech brand becameto market leader. Just like in case of „little cars”, concerning utility vehicles decreasing sales figuresare typical, although in case of certain vehicles there are examples for expansion too: sales figures of trucks with a gross weight of 3.5 tons increased by 25.4 percent, and vehicles over a gross weight of 15 tons grew by 1521.6 percent. In case of buses there was a decrease of 41.9 percent. Sales of motorbikes increased by 50 pieces, to 7541. Peugeot was the only producer that reported decrease.The top list is led by Aprilia, after the 629 pieces sold in the year before last year the companymarketed 1330 motorbikes last year. – informed Napi Gazdaság (Daily Economy Journal, the paper publishes exact data about passenger car sales in a tabular form. (NG p4)

TRADE, FAIRS - 22.01.2004

Communications manager at Praktiker Péter Jenőfi is the marketing-communication manager of Praktiker Kft. The professional has beenpreviously working at the Hungarian department of Triumph International. To fulfil marketingcommunication duties related to Praktiker stores in Hungary and Austria belong to his presentactivities as well. (VG p7)

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Leasing companies to lose on large carsBesides used car dealers, leasing companies are also hardly hit with the introduction of theregistration tax on 1 February, since financing companies have to settle a significant decrease of covering value on contracts made on large cars that can be even millions of forints cheaper on theback of the new tax. This way, it is possible that a new Audi will be cheaper in February than the sumthe leasing company has paid the dealer at the end of December for a car finance with a 30 percentown funds. Although there is a regulation in contracts that would make it possible for leasingcompanies to cover additional coverage, but experts of the leasing market are of the opinion thatmarket players are not likely to make use of this clause, since expensive cars have a smallpercentage in the whole vehicle fleet and market margin is covering the additional risk. The Eurotaxcatalogues, said to be the „Bible” of car dealers is following the presently unpredictable marketmovements with a delay of 3-6 months, that is why employees of financing companies have to have abetter knowledge of market movements. Besides negative consequences, the introduction of theregistration tax will also have a positive effect for financing companies, since the abolishment of fakebills will make it easier to calculate the real value of vehicles, plus the import of older cars willpractically cease to exist, since the new tax makes differences in terms of environment protection, too.The latter change is even more important, since leasing companies have been forced because of

harsh competition to finance cars with a large risk factor, usually old ones, up to now. György Verő,General Manager of Raiffeisen Leasing says that this year’s financing conditions are defined in thecoming days. Under the new rules, they would undertake the financing of cars younger than 7 years,however, exceptions are possible. (NG, p 1 and 4)


Avis opening regional centre in BudapestLondon-based Avis car rental company opened the new European Business Support Centre inBudapest. The new centre will take care of customer services, financial processing and ITdevelopment. Avis is to spend around EUR 12 million (HUF 3.18 billion) in Hungary with a significantpart of this sum earmarked for training the workforce. According to plans, Avis offices of Europe, Near East and Africa will all be directed from the Budapest centre. Avis rental car is present in 160

countries around the world and had revenues of around EUR 4.5 billion last year. It has 5,000 officesworld-wide and boasts a vehicle fleet of 450,000 cars. The Ministry of Economy has granted HUF 100million to the investment through the Smart-2 economic program. Whilst choosing the place for theEuropean Business Support Centre, the qualified nature of workforce in terms of informationtechnology, finance and foreign languages, together with the outstanding quality of the Hungariantelecommunications sector and competitive cost level were all taken into consideration. In theHungarian car rental market, there are four international groups present besides Avis, together withseveral smaller Hungarian firms. According to calculations coming from the 22-member Association of Hungarian Car Rental Companies (Magyar Autókölcsönzők Szövetsége), the Hungarian car fleetnumbers 3,000-5,000, depending on the season. Foreign car rental is a service only from internationalnetworks, since appropriate safety services can be ensured only through a comprehensiveinternational network. Hungarian tourists are more and more frequently renting cars as tourists or for

business trips abroad with many of them taking advantage of the on-line booking possibility. Foreignrental can be paid for in Hungary in forints, too. Hungarian tourists are making use of car rentalservices mainly in Mediterranean countries, in Benelux states, in USA and for business reasons inGermany, Great Britain and in France (NG, p 4, VG, p 14)

Both Mercedes and Mazda reduced pricesWith the introduction of the registration tax brand dealers will reduce the prices of not only topcategory models, but certain small cars as well. Though based on the published list the price of the1.2 litre Skoda Fabia increased by 0.3 percent, for the 1400 cubic centimetre Fabia Best HUF 50thousand less than earlier, only HUF 3.264 million has to be paid. According to experts, the favourableimpact of the new tax on prices can be perceived in case of a price above HUF 2.8 million. After Porsche Hungaria and Wallis Mercedes-Benz and Mazda also published their new price lists. All types

of the former brand will become in average 10 percent cheaper, but in case of the latter only a fewmodels, for example Mazda 6 and the minivan named MPV will cost less by 6-12 percent. There arerepresentations, for example Ford, Daewoo and Opel that will not correct their prices. According totheir information, they did not modify their prices when the forint was record low either, therefore theywill not react immediately now either. At Fiat they stated that their list prices can be considered cheapanyway, therefore they rather try to seduce customers with promotions. (NG p13)

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Summit motors bettering its figuresNissan importer Summit Motors Hungary Rt sold a total of 4,785 cars last year, thus increasing figuresposted a year earlier by 6.9 percent. Passenger cars accounted for an 88 percent stake in salesfigures. According to experts from the sector, this year can see a total of 230,000-240,000 new carssold in Hungary this year with Nissan’s market share reaching 2.8 percent. (NSZ, p 10)

TRAFFIC, TRANSPORT - 22.01.2004

Skoglund to found forwarding companySkoglund Holding Befektetési Rt. (Skoglund Holding Investments Co.) seized a stake of 63 percent inT. E. Logistics Rt. as founder. The equity capital of the new company dealing with international freightforwarding adds up to HUF 159 million. The board of directors plans a net sales revenue of HUF 2.3billions in the company’s first business year. (NSZ p10)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 19.01.2004

Óbuda Gate is soldPolonia Property Fund being in the management of Allied Irish Bank bought Óbuda Gate for HUF 7.2billion from NCC Property Development. The office building was handed over in October, 2001. Theutilisation of the 14 thousand square metre large building is currently 85 %. Its tenants include Ford,L'Oréal, Unisys and Sony. (NG p17)

INVESTMENT, DEVELOPMENT - 20.01.2004Baseball stadium in Budapest?The possibility of building an international level baseball stadium is examined in Budapest – learnedVilággazdaság. The investment would require HUF 2 billion even according to careful estimations. Attila Borbély, president of the Hungarian National Baseball and Softball Association, said that for thetime being the plan is in an initial phase. The investment can be implemented with state and sponsors’help. The association has already contacted the sports ministry. (VG p7)

Construction sector waiting for metro tendersBudapest Mayor Gábor Demszky signed a contract with outgoing Finance Minister Csaba László onMonday on the joint financing of the construction of Budapest's fourth metro line. Demszky announcedthat at the end of February when all licences from authorities and concerned self-governments are in

place, parts of the investment tender bids could be invited for. Budapest will start negotiations with thesix districts of the capital on ground works. The 10-stop project is to cost HUF 235 billion with HUF194 billion being the cost of the metro construction. The government is going to give HUF 154 billionwith the remaining part earmarked by Budapest. The government will make an advance on VAT andundertakes a guarantee on EIB loans. Owner and operator of the new tube line will be BudapestPublic Transport Company BKV. The green line is set to be finalised by the end of 2008, running fromKelenföldi Railway Station to Baross Square. In the meantime, preparatory works of extending it toBosnyák Sqaure will also start, together with the planning process of new No. 5 line. Metro tenders willhave a large interest from the side of construction companies. According to preliminary information, atotal of 15 to 20 invitations for tenders can be expected, all are connected to a certain stretch of it.Endre Apáthy, General Manager of Hídépítő is counting on numerous foreign applicants in theprocess. He is of the opinion that Hungarian companies stand no chance in getting drilling jobs for thetunnel, since they have not large capacity and old experts do not have up-to-date knowledge.However, when it comes to station and utility constructions and ground works, they do have a lot of experiences. (VG, p 7, NG, p 3, NSZ, p 4)

Hunguard developsHunguard, which produces float glass in Orosháza, plans modernisation in the value of 55.8 millioneuros. The development’s emphasised area is environment protection, for the sake of which a nearly90-day long stop is expected in the factory this spring. (Békés Megyei Hírlap, Jan. 16th p1)

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Lidl in swingLidl Holding Kft. started construction works of its unit in Kaposvár and the building of its store inTapolca will start soon as well. Both stores will have a market space of 1600 square metres, the unit inKaposvár will be finished by spring, while the other by autumn. The building in Kaposvár is locatedbetween OBI and Plaza near to central square. Lidl intends to establish a network of 100 unit inHungary, the company plans to open five stores this year. The building cost of each stores will add upto HUF 3-3.5 billion. There will be 25-30 stores in the network in two years. The company bought a

site of 11 thousand square metres in Komárom recently, while they have already received the buildingpermit for their project in Békéscsaba. At the same time, the investment, in the framework of whichLidl constructs a logistic centre of 30 thousand square metres in Székesfehérvár, in order to serve itsHungarian network as well as the Central-European region, is in progress. The value of theinvestment adds up to HUF 10 billion. Lidl will build the teaching-store network, where the personnelof the stores will be trained, in this area too. (NG p5)

TriGránit in the running for MahartReal estate developer TriGránit with famous businessman Sándor Demján plans to take part in therunning for Hungarian shipping company Mahart – daily Népszabadság has learnt. Mahart was brokenup for parts late last year and German Meyer group, plus three Hungarian companies - Masped Rt.,Plimsoll Kft. (the company of Dunaferr’s Portolan management) and Waberer's group were interested

in parts and real estates of it. However, Hungarian Privatisation and State Holding Agency ÁPV Rt.has still not announced the privatisation strategy, although a government decree forced it to do soalready in December. Information has it that Trigránit would especially be interested in the harbour of Csepel on an area of more than 110 ha, and plans to buy it together with Waberer’s group, the latter just having bought Volán Tefu and Hungarocamion, thus becoming the largest domestic transportationfirm. Experts are of the opinion that the Demján company would start real estate investments, whilstthe haulier would develop the so-called Ro-Ro shipment (combined transportation of goods on roadand by ship). Masped Rt., the most significant Hungarian transportation company, is thought to have joined its forced with the Dunaferr-related company to purchase Mahart Dunacargo Kft., the operator of Mahart’s fleet of ships for a price of at lest HUF 500 million. Waberer’s group would enter the racewith a foreign investor and at the same time German Meyer group, the largest transportation companyon Danube, would go out of it. (Nszab, p 1 and 13)

University colleges from private investmentsNext year the government would build five thousand new college spaces under the co-operation of thepublic and private sphere on land being in the state’s ownership but the universities’ use. Studentcolleges built and operated by private investors will provide increased level services; for rooms withone or two beds HUF equal to 100 euros will have to be paid monthly, but this will not only be borneby the student: they will be helped by an housing loan, which will be increased from the current 3300to HUF 10 thousand by 2006, but the university can also contribute to the costs. Up to now five publicprocurement tenders were announced, the winner would be selected through a public procedure,through negotiation. The most important aspect of evaluation is the amount of the fee to be paid bythe student. It is a condition that the investor has free capital equal to one-tenth of the investment,appropriate revenues and references. 2-3 dozens of companies can meet these criteria. (MH p10, 11)

INVESTMENT, DEVELOPMENT - 21.01.2004Dataplex buys its data centreDataplex Kft. buys Hungária Informatikai és Logisztikai Központ –HILK (Hungaria Informatics andLogistics Centre) from Remedin Kft owned by Béres group. The company’s data-traffic centre can befound on this site of 2.6 hectare, located in the 8th district of the capital. Beside the mentioned centreof Dataplex, the ground space of which adds up to 8800 square metres, an office building of 2400square metres and a warehouse base of 4800 square metres can also be found on the site. The officebuilding is leased by clients of Dataplex and the warehouse is leased by pharmaceutical companies.The transaction of forint billions is financed by CIB Ingatlanlízing Rt. (CIB Real Estate Leasing Co.).(NG p5)

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Irish investors in Sármellék? An Irish consortium made up of a financial and an institutional investor has made a bid for thedevelopment of the Sármellék airport, together with the purchase of the operator of the base Zalavár-Sármellék Airport Kft. As István Zóka, the General Manager of the airport that posted an annualpassenger number of 22,000 last year said, the Irish investment group would build the wholeinfrastructure of the airport in an investment of HUF 500 million and would fly direct daily flights to theWestern part of the Lake Balaton region. On top of this, they would transport a total of 100,000

passengers to the airport. Having done this, the airport could already be operated profitably. Thecurrent operator will start negotiations with electronics manufacturer Flextronics on the improvementof the airport. The latter one could be interested in the modernisation process, since its mainHungarian production base is in nearby Zalaegerszeg. (Flextronics wanted to take part in themodernisation of the county seat’s airport.) To ensure air traffic, only 200 ha of the total 400 ha areais necessary with the remaining part possible to be used for industrial goals – Zóka added. He is of theopinion that should negotiations on the development project be successful, then soon the secondlargest and second most modern airport of Hungary could be realised there. (NG, p 5)

Pioneer expanding in SzarvasPioneer expands its business-premises in Szarvas to be the biggest sowing-seed plant in the world.The area adds up to 10 thousand hectares that produces 30 000 tons of sealed sowing-seeds a year.

The investment costs 40 million dollars. Beyond domestic demand, surplus will be sold in Europeanmarkets. („24 Óra” - 24 Hours, Jan. 15, p5)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 21.01.2004

Helena house fit for occupationResidents can move in to 53 homes of Helena building as of February 15. The house was handedover recently. Autóker Holding started the construction works of the complex built with high roof andterraces in 2002. The house is located on a site of 805 square metres in the 6th district of Budapest,the cost of investment added up to one billion forints. (NSZ, p5)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 22.01.2004After VAT on plot of land, now construction material makes houses more expensiveThe vast majority of real estate developers have increased prices of new homes by 7-8 percent on theback of plots of land exposed to a 25 percent VAT form 1 January. Of course there are exceptions:companies that managed to sell most of their real estates during the rush at the end of the year canask for 12-15 percent more, since even at this rate they can be sure of a successful sale. However,those who could not sell homes last December can find themselves in a situation when it is the realestate developer that has to cover the excess VAT cost. For home constructions starting later, higher construction material prices also have to be added, translating into another 10-15 percent priceincrease. (MH, p 1 and 11)

New market place at Garay squareThe reconstruction of Garay square market place will be started this year. A significant part of the fullcosts that add up to HUF 8 billions will be covered by private capital on one hand and a sum of HUF2-2.5 billion will be given by Erzsébetváros (municipality of the 20th district of Budapest) on the other

hand. A four-storied underground garage will be constructed under the three-storied building. Morethan a hundred homes will be built in the upper stairs and two guarded playgrounds will be erected inthe roof-garden. The new market place will be handed over at the middle of 2005. (VG p15)

INVESTMENT, DEVELOPMENT - 23.01.2004

Nokia to invest over EUR 50 million in phone factory in KomáromFinland's communications hardware manufacturer Nokia has decided to double its Hungarianproduction, in an EUR 50 million investment, it was announced by General Manager Jyrki Jalasto. Headded that the company has considered logistics implications before making the decision, butHungary’s impending European Union accession also played a part. Plans call for mobile phonesmanufactured in the new plant to make it to the market already in September. Nokia will supplyEuropean, Near East and African markets, all with increasing demand, from Hungary. For the time

being it is not known to what an extent larger capacity will increase the company’s exports, but Nokiadoes not want to become Hungary’s largest exporter at any price. According to calculations, NokiaKomárom Kft. currently occupies fifth place in the list of largest exporters. (NG, p 5)

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CULTURE - 19.01.2004

Free Sting concert in BudapestOn June 5th Sting will give a free concert in Budapest in Hősök tere – announced the rock star‘sofficial homepage. The event is said to be organised by Westel, but the largest Hungarian mobileservice provider does not state in the case for the time being. (Nszab p19, NG p5)

MEDIA - 21.01.2004

Papers will become more expensiveOn a publisher level Sanoma Budapest raised the prices of its papers by 7-8 percent in January. Onlythose publications did not get more expensive, the market of which is especially price sensitive, suchas women’s service providing magazines. Sanoma will publish a new women’s magazine in weeksunder the name of Maxima. Ringier Publishing plans a price raise for February or March. Theincreased VAT rate will mean additional expenses of HUF 2 billion for papers this year. (VG p10)

OTHER - 22.01.2004

Baumgartner to start in Forma 1Hungarian driver Zsolt Baumgartner will surely take part in Formula 1 races next season. Manager of Baumgartner Tamás Frank said that with the help of the supporters’ club, together with sponsorshipfrom two – for the time being unknown – multinational companies it will be possible to meet thecontract signed with Formula 1 team Minardi back in December. Although the whole amount of moneyis not in place, but since Minardi wanted to have a final answer, a decision had to be taken and Franksaid that they undertook to meet the contract criteria. A group of foreign companies has showninterest recently and was ready to give the HUF 380 million sponsorship earlier refused by Hungarianoil and gas company Mol, their only condition being that Baumgartner would start not as a Hungarianracer. The offer has been turned down. Today will see Baumgartner testing seats at Minardi. (MH, p18, Nszab, p 1, NSZ, p 1 and 14, NG, p 4)

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