Hungary becomes magnet for Asian companies, South Korean firm invests €724 million in new plant

Hungary is one of the most successful countries in handling the economic effects of the pandemic, and a key plank of that strategy has been “opening up to the East”

editor: REMIX NEWS
author: Mandiner
Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó (first Left) in Seoul. (Facebook)

South Korean aotumotive firm EcoPro BM will set up its first plant outside South Korea to produce cathodes for lithium batteries, with an investment of 264 billion forints (€724 million), creating 631 new jobs in Debrecen in eastern Hungary, announced Minister of Foreign Affairs and Trade Péter Szijjártó in Seoul on Wednesday.

Szijjártó said that 108,000 tons of cathodes will be produced at the facility every year, which is enough to produce batteries for 1.35 million electric cars. The first phase of the construction is expected to be completed in the second half of 2024, the second one a year later. EcoPro BM was the first company in the world to produce cathodes with 80 percent nickel content. In addition, Debrecen will be the first such plant in Europe, which means Hungary’s role in the continent’s electric car industry may become even more prominent.

Szijjártó emphasized that there was a sharp international competition for the investment, for which the government also provides financial support. However, the extent of this will not be made public until after the European Commission has been notified.

“It is clear that Hungary’s attractiveness did not decrease during the crisis, but even increased. And further tax cuts will further increase the country’s competitiveness,” he said. He highlighted that the project just announced was the second-largest investment this year, and the first place winner was a South Korean company, SK Innovation. In 2021, more than half of all investments in Hungary came from the East Asian country. He underlined that almost all of these are being carried out in the “revolutionary” automotive industry.

SK Innovation signed an $2.3 billion (€2.03 billion) investment in northern Hungary — also a car battery factory — in February.

Szijjártó added that there is a great need for such investments in the industry of the future in order for Hungary to maintain its position as one of the flagships of the European automotive industry. The Hungarian automotive industry accounts for 30 percent of total manufacturing output, so the sector is dominant for the economy as a whole and for long-term growth.

Hungary has provided one of the most successful economic responses to the epidemic in the world

The minister highlighted that last year was a black year for the world economy due to the coronavirus epidemic, when 114 million jobs were lost globally, investment fell by 42 percent, and world trade fell by more than 5 percent.

“The Hungarian economy has taken a completely opposite path to these processes, we have been able to break huge records in terms of key indicators,” he said, pointing out that employment, quarterly economic growth and investment peaked. Szijjártó said that Hungary has given one of the most successful economic responses to the epidemic in the world by using budgetary resources to support investment instead of financing unemployment.

He said this would not have been possible without the strategy of opening up to the East, “which has now clearly become a success story.”

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