Hungary's HIPA investment agency: Interview with new CEO

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István Joó, CEO of HIPA.
Six months into his tenure as CEO of the Hungarian Investment Promotion Agency, the Budapest Business Journal had its first sit-down interview with István Joó. We discussed the specifics of another record-breaking year in 2022, the critical industries and countries for FDI, the strength of Hungarian investments, and the project pipeline for 2023.
BBJ: In most years, HIPA either breaks its record for investments in terms of value or is very close to it. What was the story in 2022?
István Joó: It was a successful year for HIPA because we reached new records in 2022. The investment volume amounted to EUR 6.5 billion, a new all-time high in the history of Hungarian investment promotion. And with those investments, the companies committed themselves to creating 15,000 new jobs on top of retaining 42,000. As a reminder, in 2021, the investment value was EUR 5.3 bln. So we are talking about a year-on-year increase of some 23%. We were able to close 92 deals in 2022.
BBJ: Are those 92 projects both investment and reinvestment?
IJ: It was both, and HIPA contributed mainly with non-refundable cash. We have a wide range of services we can offer to companies; identifying the necessary land, potential sites for the investment, and handling all kinds of company issues: HR-related, taxation, cooperation with universities and higher education. We have a bunch of services that we can offer to companies.
BBJ: Which countries were the leading foreign investors?
IJ: First of all, I’d like to mention the success of the “Opening to the East” strategy of the government, which was launched back in 2012. In 2022, 48% of our investments came from Eastern countries, 42% came from the West, and Hungarian companies made 10%. HIPA deals not only with foreign investors but also helps the expansion of Hungarian companies in the country.
Our largest investor, based on volume, was South Korea. Germany was the second, and Hungary third. And this was followed by Switzerland, France and Japan. I’d also like to mention China here because it is a vital partner for Hungary. Last year, we announced the most significant greenfield investment in Hungary’s economic history, CATL’s more than EUR 7.3 bln investment in Debrecen [230 km east of Budapest by road]. But, since physical works are just about to start in the first or second quarter, this number will be reflected in the 2023 data.
Germany is always a key investor in Hungary. Mercedes-Benz announced an expansion in Kecskemét [93 km southeast of the capital], Audi has announced some developments in Győr [119 km northwest], and BMW decided to further expand its Debrecen factory, which is now under construction. This is encouraging news from Germany, let me name Thyssenkrupp, Kostal, Diehl, Bürkle, and Infineon, which are important partners for Hungary.
Hungarian companies were successful not just because they implemented the third-biggest investment volume in the country in 2022. They were also third based on the number of new jobs created and second in terms of the number of new projects.
BBJ: Is that a relatively new trend, the level of input from Hungarian companies?
IJ: Based on investment volume data from the previous nine years, Hungary ranked between seven and two, and typically made at least the top five   over the last few years. One should not forget that HIPA deals not just with foreigners but also with Hungarians. Sometimes I need to draw the attention of Hungarian companies to the fact that they are also entitled to our services.