The leading electronics manufacturing company, Jabil Circuit employs almost 9,000 people in Hungary, the main parts of your Blackberry probably was made here. This blog post provides an insight into the company's operation in Hungary.
Jabil Tiszaújváros
Jabil Tiszaujvaros
Jabil Hungary, with 1 billion € turnover, is a top100 company in the country. Its Tiszaujvaros plant (Eastern Hungary) is one of the largest manufacturing facility of the company in Europe. Almost 8,000 people work for Jabil in the little town, which has a population about 16,000 - Jabil recruits workers in 50 kms radius. The small, but highly industrialized Tiszaujvaros also has some large chemical companies, e.g: TVK, the leading plastic raw material producer in Eastern Europe. Jabil obviously calculates on the Tiszaujvaros plant in the future: there are permanent developments also in the crisis, in 2011 almost 700 new jobs were created in the facility.
In 2011, the company rented a new logistics center in the neighbouring Polgar Industrial Park, which provides logistic support for Tiszaujvaros and the Ukrainian production facilities.
Jabil Szombathely
Jabil Szombathely
The company Szombathely facility provides aftermarket services for leading electronics brands (we don't know the clients list, Jabil manages it very confidentially). Szombathely is a little town in Western Hungary (it could be known from James Joyce' Ulysses). The Jabil employs here 1000+ staff. The facility were opened in 2003, and at the beginning of the crisis there were some press news about the shutdown of the Szombathely plant, and relocation of aftermarket services to Tiszaujvaros. Finally, the Szombathely plant escaped, and in 2012 newer jobs were created during the consolidation of Szombathely activities.
Finally, let's see a short overview about the company 2013 plans:
Eastern Hungary has 95 industrial parks (link), more awarded by the “Industrial Park of the Year” award. It’s more, than the number of industrial parks in Poland.
#3: Focused education
Eastern Hungary has +53% more university and collage students than Western Hungary. Eastern Hungary has 2 electronics university faculties, and the electronics-related vocational education is also strong.
#4: Large labour supply
The number of unemployed people of Eastern Hungary is 300k, which is equal to entire Slovakia.
#5: Governmental incentives are focusing on Eastern Hungary
The goal of governmental incentives is to orient foreign direct investments into underdeveloped regions with high unemployment. Eastern Hungary is among the most intensively (potentially 50%) subsidized regions of the EU.
#6: Award winning location
Eastern Hungary is one of the most awarded Central- and Eastern European locations by Financial Times’ fDi Magazine: 2 regions and 2 cities of Eastern Hungary was ranked for the top doing business locations of Europe.
Company insight
Finally, the following video provides a short insight to the life of National Instuments Hungary, one of the leading Eastern Hungarian electronics companies.
No question, China is the first word when it's about offshore manufacturing. But will China remain the superstar of manufacturing in the future? The following presentation tries to tint it, and compare China to another emerging location: Central- and Eastern Europe.
Jabil Circuit is a leading global electronics manufacturing services (EMS) company, with extended manufacturing networks in the low-cost emerging countries. This story is about Jabil's Eastern European supply chain.
Jabil in Eastern Europe
The company has 2 units in Poland, 2 units in Hungary and 1 in Ukraine (map). The Bydgoszcz (PL) plant in the "Polish electronics triangle", delivers aftermarket services, the Kwidzyn (PL) plant is a manufacturing center. In Hungary, the Szombathely plant is also an aftermarket service center, and the Tiszaújvaros plant is a manufacturing center in the Eastern Hungarian Electronics Cluster. Outside the EU, the Ukrainian facility provides a super low-cost manufacturing opportunity.
At the beginning of 2011, Jabil Hungary realized the need for new warehousing opportunities. The increasing number of orders required a new facility, to support the Tiszaujvaros (Hungary) and the Uzgorod (Ukraine) units. After an in-depth site selection process, the European management chose Polgar Industrial Park, Hungary. Polgar is closed to Tiszaujvaros, by the M3 motorway, which connects Hungary and Western Europe to Ukraine, and the nearby M30 motorway connects Hungary to Slovakia and Eastern Poland. The company rents a 4500 sqm (approx. 48,000 sq.feet) facility since the summer 2011 in the Polgar Industrial Park. “The establishment of a new facility performing comprehensive warehousing tasks, meeting the demands of the Hungarian and Ukrainian needs became necessary for Jabil due to expanding requirements and the increasing number of orders. Taking the requirements of Jabil into consideration, the Polgár Industrial Park offers the best possible solution.” says Lajos Palásti, the managing director of Jabil Circuit Hungary.
Backround video: Jabil supply chain management
The following video provides a short insight to Jabil's supply chain solutions.
The future in Transportation infrastructure
(logistic) between China and East Europe
Transportation infrastructure, or we can
simply say logistics.
If we get down to building the bright
future for East Europe, then investment definitely comes first. However
precondition and base has to be met. This is exactly the part of logistics.
For better understanding, let us see the
general condition of East Europe:
There are 18 countries (except BY, UA and
RU) on this land and population with 250 million (except RU).
The transportation volume statistic in each
country (per years) :
Clear
views on transportation in East Europe
Airborne in East Europe:
1.Speed fast (lower the risk in
transit, suitable for valuables and precise instrument)
2.No geographical restriction
3.Few airport comparing to West
Europe (it takes time to build airport, also with high cost, thus, just a few
East European countries use air transport)
Waterborne (shipping) in East Europe:
1.The overall level of shipping
in East Europe is low
2.Out-dated and backward in
management system
3.Improper fleet construction
4.Lack support of fund
5.Less developed in private
shipping industry
Not competitive in the international
shipping market, also the needs of shipping cannot be met.
Just a few East Europe countries have
waterborne transportation.
Most of the East European countries are far
from port, therefore it falls behind.
Road transportation in East Europe:
1.High flexibility and
adaptability (much much frequently use then railway and shipping)
2.“door to door” can be realized
(directly sent to different farms and industries in different district)
3.Low scale of volume, high cost
4.Low security index,
environmental unfriendly
5.Backward in road network (low speed
of improvement in transportation infrastructure)
Railway in East Europe:
The main type of transportation from 1990
1.High speed
2.Low land occupation (comparing
to other types)
3.Environmental friendly (the
electric locomotive basically has no toxic gas)
4.High security index (relative
reliable)
5.Low cost in transportation
6.High scale of volume
7.High resistance to changeable weather
conditions
8.Improper allocating in cargo
capacity and infrastructure, high cost in using infrastructure
9.Relative worse relationship between
the state, the manager of infrastructure and transportation company
Let’s see the transportation infrastructure
from the view of Hungary.
First of all, we cannot ignore the significant
meaning in logistics as it is the heart of Europe. Since it became part of the 455
million populated European Union in May, 2004. All investors and foreign
companies can see are new opportunities in their eyes. Logistics and
transportation services became one of the 7 largest industries in Hungarian
development system.
As the main part of developing Hungary, the
Hungarians are bending themselves in gradually becoming the logistic centre of CEE
countries.
The main
suppliers in logistics
The logistics market in Hungary scales $1
billion and it is keep developing in a relative high speed.
After 8 year the scale will doubled or
tripled.
Nowadays, logistic takes the main force in
Hungarian enterprises, the market share of foreign companies only takes 13% from
more than 41 countries even if the foreign companies continuously entering the
Hungarian logistic market. The main FDI are coming from the neighbor countries
like Netherland, Germany and Austria.
Rynart
Group, Netherland.
It has cooperated with Hungarian
enterprises since 1980s in warehousing customs clearance, domestic distribution
network etc. the subsidiary called Rynart Transport Hungary Kft. In Hungary has
becoming one of the bellwether in Hungarian logistics service supplier.
REWICO, Germany.
Who entered Hungary since 1996, purchased
the share of partners in Hungary, it has further plan in taking over other
logistic companies there, which aims to be one of the top 10 logistic
companies.
Also there are other logistic companies
like DHL, Frans Maas, Kuehne&Nagel, NYK Logistics, Rudolph Logistik, UPS
and Wincanton etc.
We cannot
ignore the sponsorship from government is another main incentive:
The targets in building logistics market
from 2007 to 2015, Hungary.
1.Build the central network of
logistics. Environmental friendly and modernization.
2.Develop infrastructure of the ports
(Gyor-Gonyu, Budapest, Dunaujvaros and Baja) along the Danube.
3.Develop the international
airport in separate areas (Budapest, Debrecen and Sarmellek).
4.Introduce the Intelligent
Transport System to improve the transportation efficiency.
From
the view of Chinese investors and responders in East Europe
On the one side, China lays the stresses on
investing CEE (16 countries)
On the other side, the CEE countries pay
more attention on what China going to do next and the trend of how Chinese
economy will be.
There are recent proofs supporting the
situation we face now, where we see China and Eastern Europe are waving hands
to each other.
In
terms of related legal bases
It is well-known that the Shanghai EXPO was
holding in the summer of 2010, not surprised a public lecture or training
organized by China-EU School of Law and the China University of Political
Science and Law was holding in the European Union pavilion on 26th
of July, 2010. The main subject to this lecture is the potential opportunities
and future achievements in directly investing in Eastern Europe from China. This
training involves the movers and shakers from different universities in
Hungary. Such as Andras Kisfaludi and Attila Menyhard from Eotvos Lorand
University, Tibor Tajti from China-EU University. The training shared the
successful achievements (mostly in Hungary, Poland and Latvia) and the
companies (eg: Huawei, Lenovo, Kinglong and TBV), clarified the legal parts
which directly influence FDI from China especially the applied new laws, in
discussing the best way for investing Eastern Europe under the advanced
investment model. Where we can say this is specially designed for Chinese
potential investors and the waited opportunities in Eastern Europe.
In
terms of related political bases
As Hungary is the heart of Europe, it makes
sense that FDI starts or sets Hungary as the main target. Where we can see from
the official conference between Chinese and Hungarian President as the
following video, which was holding just in the year 2011.
Right after the year of 2011, the Chinese
government has made several actions in this following year. New rules, new
investors, new missions and new opportunities. That’s their job.
The most obvious is on 26th of
April, 2012, Wen Jiabao, President of China had a meeting with all the 16
countries presidents in Warsaw, Poland.
In terms
of the investors’ interests bases
The so called “2012 International Economic and
Trade Fair for Central and Eastern European countries” was holding in Beijing
CBD on 18th, September, 2012. The Chaoyang District has been the
first one who signed the Strategic Alliance Agreement with 16 CEE countries as
the No.1 district concerning foreign affairs in China. From the date the
agreement approved, all the Chinese competitive and strong enterprises will
have the priority to enter and invest in the 16 countries (eg: Slovenia, Bosnia
and Poland). The field of investment involves some important sectors like telecommunication
service, transportation infrastructure and financial sector.
In terms
of the financial bases
Wen Jiabao, President of China announced on
26th of April, 2012, the meeting with all the 16 countries presidents
in Warsaw, Poland. China will provide a special credit limits $10 billion with
preferential rules for supporting the cooperation in the field of
infrastructure, high technology and green economy etc. initiates the mutual
fund under the collaboration.
Then we are looking forward to the bright
future in East Europe and be patient to see what will happen.
