Despite the coronavirus pandemic 2020 was a year of successful foreign direct investments
2021. 01. 25.
2020 was also a special year for the Hungarian Investment Promotion Agency (HIPA). Although operations were still normal at the beginning of the year, the pandemic that started in the spring brought about unprecedented challenges for both investors and the country at large. Despite the circumstances, HIPA contributed to the implementation of 907 projects in 2020, as a result of which investment worth EUR 4,078 million is realized in Hungary, creating 12,914 jobs.
Forming part of the projects are the 97 large FDI projects in relation to which a positive investment decision was made for Hungary in 2020. These developments are worth almost EUR 2.5 billion and will create 10,112 new jobs in the next period.
In addition to the above, and in view of the pandemic situation, 810 companies applied for two competitiveness programmes launched under the Economic Protection Action Plan last year, undertaking to invest over EUR 1.6 billion. On top of the implementation of investments, the medium-sized and large enterprises under the programme adversely affected by the outbreak of the coronavirus have pledged to retain their employees and create an additional 2,802 jobs.
Large FDI projects
Examining the above mentioned 97 projects according to country of origin, it can be observed that Asian investments (coming from South Korea, Japan, China and India) are continuing to expand. These investors are implementing 30 investment projects (30.9% of all projects) in the value of EUR 1,165 million, creating 3,612 new jobs for the Hungarian national economy.
In terms of investment volume, China ranks first with a weight of 27.1% (EUR 664 million) while South Korea is in third place (17.8%, EUR 436 million). The largest new investment of EUR 184 million is being made by China-based Semcorp, but in addition, the projects by Lenovo and Shenzen Kedali are other major Chinese investments worthy of note.
South Korea is also a dominant stakeholder among the investors, with Doosan's reinvestment project taking the lead with an investment of EUR 206 million, though new Korean companies such as Dongwha and Iljin Materials have also emerged.
With 20 projects, Germany has made the most number of new investments, while it took third place in regard to jobs, creating 1,454. With 2,496 jobs, the United States heads the list of job creation, this figure constituting 24.7% of all jobs created.
In terms of sectoral breakdown, the expansion trend of the electronics sector and electromobility continued; in particular, manufacturers of components for electric vehicle batteries launched major investments. Thanks to the 22 projects in this area, 3,320 new jobs will be created and EUR 808 million will be invested.
It remains an important objective to attract as many high value-added investments as possible to Hungary's service industry. A significant result in this respect, is that business service centres, ICT investments as well as research and development projects accounted for a large proportion of last year's results with 25 projects and more than 3,000 new jobs. The decision of the New York-based Diligent Corporation is certainly prominent: it sets up its Global Product Development Centre in Budapest and will initially create 300 jobs for engineers.
Among the investments, special emphasis was placed on the food industry, partly due to the pandemic situation, since this industry represents over 10% of the projects both in terms of the amount invested and the number of projects.
It is particularly gratifying to be able to replace all or some of the jobs that have been lost through new investment projects. One such investment is Wellis' new plant in Ózd, where 800 new jobs will be created, but similarly important developments have also been launched in Gödöllő, Jászberény and Nemesvámos.
In addition to sectoral diversification, the balance in geographical distribution is also a priority. In 2020, at least one new investment decision was made in favour of each of Hungary's counties. Most of the investments were linked to Pest County, followed by Budapest, with the third place on the podium taken by Borsod-Abaúj-Zemplén County.
Hungary's achievements in the field of investment promotion were again recognized with several international awards last year: HIPA won the title for the region's best investment agency for the second time at the annual congress of the Annual Investment Meeting (AIM). Based on the Best to Invest 2020 report of Site Selection Magazine specializing in investment topics, Hungary was listed among the 10 best investment target countries in the world for the third time, and HIPA maintained its first place as the region's best investment promotion agency for the third time in a row.
