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Health industry

The long-established Hungarian healthcare sector, which dates back to over 100 years, is recognized all over the world. Its reputation was cemented by entrepreneurs whose companies operating in the first decades of the previous century would nowadays be called multinational organisations. Gedeon Richter is a prominent figure among them. He was one of the first people in the world who made a successful attempt to produce pharmacy products on an industrial scale. His prestige was reinforced by patented medicines known all over Europe and the world such as the disinfectant Hyperol that proved useful in World War I and the antipyretic drug Kalmopyrin.

As far as Hungarian medical research is concerned, Albert Szent-Györgyi is a household name as the winner of the Nobel Prize for discovering vitamin C. Furthermore, Georg von Békésy, who was awarded the Nobel Prize for his research on the function of the cochlea, also started his scientific endeavours in Hungary.

The Hungarian health industry spans many areas such as the pharmaceutical industry, the manufacturing of medical devices and equipment, the herbal medicine industry, as well as biotechnology, genetics and bionics. Meanwhile, significant developments involving nearly every sector are underway in the field of healthcare informatics. Since 2017, the latter also enjoys the support of the Digital Healthcare Development Strategy. Hungary is teeming with thermal and medicinal water springs and has excellent geothermal conditions. It has been capitalising on its various hot springs and the experiences and knowledge gained over the centuries, which resulted in many tradeable Hungarian developments in the field of balneology.

International markets show more and more interest in Hungarian healthcare developments every year. Exports in the healthcare sector increased by 65 percent between 2012 and 2019.

In 2019, Hungarian companies exported more than EUR 1.5 billion worth of medical devices. A quarter of these were sold in non-EU markets. The industry accounts for 9 percent of Hungary’s exports outside the Union. As previously mentioned, the Hungarian pharmaceutical industry is quite robust: it is the 18th biggest exporter in the world within the sector. Hungarian pharmaceutical production accounts for 6 percent of the total Hungarian GDP with 85 percent of the products being exported. The foreign trade surplus of EUR 27 million per employee exceeds even the motor vehicle industry, which is also in a dominant position. The pharmaceutical industry is our most innovative manufacturing sector. One fifth of the domestic R&D expenditures is associated with the sector, which invests 20 percent of its profits in R&D activities. Each year, Hungarian pharmaceutical companies file more than 40 new patent applications and more than 160 new market licenses.  What’s more, the Hungarian health industry has considerable achievements under its belt in terms of promoting developments. For instance, a Hungarian patent can help develop drugs that elicit faster immune responses (ImmunoGenes Kft).

Hungarian markets show tremendous potential as well: the Covid pandemic reinforces forecasts according to which domestic manufacturers’ share within the sales of medical devices could increase to 50 percent from the current 18 percent.

Health tourism is gaining more and more ground within the health industry. Foreigners are typically interested in dental services and cosmetic surgery provided in Hungary. We are also acclaimed within the field of innovative rehabilitation therapies. The Pető method and the uniquely Hungarian early development and physiotherapy associated with Anna Dévény are globally recognised as well.

It would be remiss not to mention that due to the strong agricultural traditions, Hungary is also a leader in the field of animal healthcare. Numerous Hungarian companies develop veterinary medicines, a substantial part of which they export abroad.

Food industry

The Hungarian food industry and its supplier, the agricultural sector contributes 4.5% to the Hungar­ian GDP per annum, and their joint share in employ­ment amounts to 8%. According to some estima­tions, the agribusiness (agriculture, food industry and the joint, supplying, processing and distributing activities) might account to 12-13% or even 23-25% of the national GDP.

Hungarian agricultural exports worth about EUR 9 billion per annum and its EUR 2.8 billion trade sur­plus has a significant contribution to the positive balance of the national economy, making it one of the most strategically important sectors. The five largest export markets (Germany, Romania, Italy, Austria and Slovakia) accounts for half of the food export, the EU markets has a share over 80%, oth­er European markets 10-15% and Asian markets 4-5%.

Thanks to investments made in recent years, agri­culture and food industry develops dynamically, ag­ricultural productivity has increased by about two-thirds between 2010 and 2018. Investments may also shift the pattern of food exports currently pre­dominated by unprocessed and primary processed products (32 to 32%), secondary processed prod­ucts amount to about 36%, while the latter category accounts for almost half of the import. Secondary processed products represent higher added value and can be transported over longer distances, thus export markets may be further diversified by these products.

First in the EU, the ban on cultivating genetically modified crops is laid down in the Hungarian Con­stitution. High quality, strict control requirements, GMO-free agricultural cultivation, and excellent ex­pertise are a major competitive advantage for Hun­garian companies in foreign markets.

In some areas, the Hungarian production occupies a leading position at European and global level. With 500,000 tons of sweet corn production, Hungary is the leading producer of sweet corn in the European Union and ranks second in the global market.

The Hungarian honey export accounts for 4% of the global export and makes the country the lead­ing honey exporter in the EU-market. In terms of secondary processed products, salami exports rank twelfth globally, while only Italy and Spain outper­form Hungary in terms of value per tons among ma­jor exporters.

Significant share of agricultural machinery production from Hungary

Hungarian agricultural machinery factories mainly produce tillage and plant protection machines, as well as attachments for harvesting and parts for them, which plays an important role in export activities.

At the moment, machines produced in Hungary make up only about 13-14% of the total offer of domestic agricultural machines. It is interesting that based on the data of the trade association (Megosz) - despite the import of serious quantities of tractors and combines, as much as 80% of agricultural machines are produced in Hungary and sold on export markets. The largest domestic producers (Claas Hungaria, Vogel-Noot) exclusively export products. The main sales outlets of Hungarian agricultural machines are in Germany, France and the Netherlands. Certain areas in the Middle and Far East show interest in Hungarian machines that have an excellent price-quality ratio. Unlike the automotive sector, agricultural machinery wears out and consumable parts have to be serviced and replaced, while users need specialized professional training.

Hungary has a relatively strong position in the global seed market. This is due to favorable local and climatic conditions, tradition, GMO-free technology, highly qualified experts and continuous efforts to innovate. Their seed exports amount to about 400-450 million EUR, which makes up 8-10% of world trade. Exports of corn and wheat seeds from Hungary are in third place. Exports are mainly based on Central and Eastern European countries, but thanks to recently developed drought-resistant varieties, Asian and African markets are also gaining in importance. Decades of experience and knowledge have launched many research institutes and corporate research bases and positioned them at the top - ZKI Kft, Gabonakutato Kft or Marton Genetics Group. The companies KITE and Nitrogenmuvek - occupy an excellent position in Europe in the field of agrochemicals and fertilizer production. The annual turnover of domestic agrochemical exports exceeds EUR 500-600 million.

The new direction of development is supported by the digital agricultural strategy, which is a revolutionary initiative within the EU. Development ranges from integrated enterprise resource planning (ERP) and process control systems, to solutions for robotics and drone technology.

The office of the Hungarian Export Promotion Agency (HEPA) aims to acquaint the Serbian market with the potentials of the Hungarian agricultural industry and the possibilities of mutual cooperation.

"The increase in exports of small and medium-sized Hungarian companies that are not yet recognized in our market is connected by the regional office in Belgrade, HEPA Balkan Office, which is in charge of introducing our businessmen to Hungarian companies and their products. The sector of production of agricultural machines stands out as a part in which there is a great potential for cooperation between Hungarian and regional businessmen, points out Nemanja Milutinović, the regional director of HEPA.

Development history

The pioneer of Hungarian production of agricultural machines was Ede Kuhne, whose father was the founder of the second largest German steel plant. The young expert, who had experience in designing and constructing machines, bought the factory in December 1863, where he began to develop innovations. The most prominent among them were the Kuhne's patented spaced seed drills. Kuhne's factory was the first in the country to use electricity in industry. Ferenc Okolicsani, who settled in London after his doctorate and then created the world's first electronic seed sorting device, is also of Hungarian origin. Gunson’s Sortek Ltd, the company he founded then, still exists today and exports products to more than 100 countries.

Hungarian agricultural mechanization received a new impetus in the 1960s, when it became obvious that the industry needed more powerful machines for efficient crop production. It was a serious feat for the actors in that sector to succeed in convincing the political decision-makers of that time to start joint programs with American or German manufacturers and to replace as many machine components from abroad as possible with domestic products. This is the period when Taurus tires gained a reputation, but production permits also accelerated the production of tractors and machines, so many Hungarian companies became suppliers to global companies (RABA Gior, Mezogep Szolnok, Agricon Kecskemet).