SINGAPORE companies looking to penetrate new markets might like to take a look at Hungary, which promises untapped potential in logistics, industrial and research areas.
Already the central European country has signed agreements with Singapore on economic cooperation and R&D, as bilateral trade reached US$800 million last year.
"That is growing dynamically. We expect trade value to go up some 15-20 per cent this year," said Peter Medgyessy, who led the Hungarian delegation to the recent EU-Asean Commemorative Summit. Hungary has attracted 700 million euros (S$1.5 billion) of foreign direct investment (FDI) from Singapore, he said.
A former prime minister of Hungary, Mr Medgyessy was once finance minister and distinguished himself by consolidating the economy, curbing inflation and launching the reform of public sector finance.
Based on his estimates, the value of FDI in Hungary is projected to reach 4-5 billion euros in 2007.
Although this is lower than the 6 billion euros seen last year, Mr Medgyessy said FDI could rise to an annual 9-10 billion euros by 2010 if transfers from the EU Development Funds are included.
He told BT that transport and logistics offer the best investment opportunities, as Hungary is at the intersection of major transport routes in central Europe. "For example, Budapest airport clocked up passenger traffic of some 10 million last year and our target is to double it," he said.
Singapore's GIC Special Investments was part of a consortium that acquired a significant stake in Budapest Airport from Britain's BAA in May this year.
Other attractive areas include consumer electronics and industrial segments, Mr Medgyessy said. Science parks that focus on environmental technology such as water treatment and alternative energy are also worth looking at. Hungary has attracted a number of venture capital funds. Supporting services like bank financing, legal advice and accounting are also readily available, he said.
Mr Medgyessy also touched on the conducive investment climate in Hungary, citing factors such as political stability and transparent laws. "Plus 95 per cent of our companies are privately owned, and we have a significant pool of skilled labour and professionals."
As Hungary is now a part of the European Union, a substantial amount of financial aid is available for development projects in Hungary. "So Singapore firms setting up operations in Hungary can partner their local counterparts to tap on those funds."
This year, Singapore and Hungary signed a master collaboration agreement to cement ties in research and development. Singapore's Agency for Science, Technology and Research (A*Star) signed the pact with Hungary's National Office for Research and Technology.
The aim is to promote joint scientific meetings, research collaboration and exchanges, and PhD and post-doctoral fellowships. Another tie-up is the Singapore-Hungary Economic Cooperation Agreement, which aims promote closer links across a broad front, including sectors like information technology and petrochemicals.
