Hungarian Gripen

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HUNGARIAN GRIPEN

A LAUNCH PAD FOR REAL GROWTH

Saab’s approach to offset is unique and benefits the entire Hungarian economy, creating a launch pad for sustainable, long-term industrial and economic growth. Saab was committed to delivering offset to the Hungarian Republic equivalent to 110% of the value of the lease/purchase agreement.

The Gripen Offset Programme was tailored to meet Hungary’s specific needs, focusing on areas of importance for the nation’s future growth. By investing in projects with real strategic and commercial potential, the Offset Programme has resulted in sustainable, organic growth that has continued to develop and expand, even after 100% of the actual offset obligation was delivered.

Exceeding the contract value

On 9 June 2009, the conclusion of the Gripen Offsetting Agreement was signed by Dr. Ábel Garamhegyi, state secretary for international economic relations of the Ministry for National Development and Economy, on the Hungarian side, and by Johan Lehander, managing director of Gripen International (GI), on the Swedish side.

According to the agreement, signed in 2001 and later amended in 2003, Saab (GI) agreed to an economic programme representing 110% of the value of the cost for the fighter aircraft leased by the Ministry of Defence for a ten-year period. At the end of the aircraft agreement, the value generated by the investments will have benefitted Hungary by far more than required by the contract.

Long-term growth

Direct, evident benefits of the Gripen offsetting programme have been embodied in the growth of foreign capital investments and Hungarian exports. Implemented on a business basis, the programme has resulted in productive investments that have become embedded into the Hungarian economy in the long-term. These investments will contribute to economic growth as well as to extended Hungarian exports after the expiry of the offsetting obligations.

Realising goals in half the time

The obligations assumed in the Agreement have been fulfilled, both in terms of numbers and structure – not within the agreed fourteen years, but in seven.

Indirect benefits

The programme has also provided further, indirect results that have not been measured, for example:

Extension of the supplier network connected to the investments;
Extended rate of employment;
Growth in revenues from taxes and contributions;
Introduction of new technologies;
Contribution to the reduction of economic differences among regions.

Improved bilateral relations

Furthermore, the implementation of the Gripen offsetting programme has been beneficial with regard to general trends in bilateral economic relations: a spectacular pace of growth could be noted between 2001 and 2006 in the field of Swedish investments as well as in commercial turnover.

One hundred companies

Today, around one hundred Swedish companies are active in the Hungarian market, employing close to 14,000 people, through a capital investment exceeding 1 billion euros.

Offset in action

Below we highlight some of the success stories generated by the offset programme.

Ericsson

Ericsson is one of Hungary’s largest companies and was established as part of an offset deal in 1991. Ericsson is a contributor both to the aircraft itself and to the Gripen oﬀset programme. Ericsson supplies the highly advanced and proven PS-05/A-Mk3 radar for the Gripen and the offset programme acted as the catalyst for the establishment of the Ericsson Global Service Delivery Centre (GSDC) in Budapest in 2004. The centre employs highly qualiﬁed engineers and delivers Software Supply & Integration, Systems Integration Network & Technology Consulting and Tools & Services Development to the global marketplace.

Ericsson supplies the PS-05/A-Mk3 radar for the Gripen

Image: Ericsson supplies the PS-05/A-Mk3 radar for the Gripen

Haldex

In October 2004, Haldex inaugurated a newly built factory in Hungary for ﬁnal assembly and testing. The factory, which currently covers 5,750 m2, is one of several planned actions aimed at improving the Group’s competitiveness and strategic position. Haldex's production and sourcing in Hungary and other East European countries is increasing while the Group’s production in Western Europe is being scaled back. Today, the factory employs approximately 125 people.

Electrolux

Hungary plays a strategic role within the Electrolux Group both from a production and marketing point of view. This is proven by the fact that one of the most important manufacturing bases of the Group is situated in Jászberény. Today Electrolux Lehel Kft. is one of the biggest industrial companies in Hungary with a decisive role in the country’s industrial exports. The company employs about 3,700 people, making it the largest employer in the Northern Plane Region.

Being a large employer brings with it a great responsibility. Electrolux believes that good business and corporate social responsibility (CSR) go hand in hand. Therefore, the company supports the local communities, primarily in Jaszbereny and Nyiregyhaza. The company also contributes to the education of children and adolescents, with everything from the building of playgrounds to cooperation with higher education institutions. The latest example is an agreement with the University of Miskolc in the northeastern part of the country, which was signed in November 2008. The objective is to facilitate the employment of engineering graduates and develop practice-oriented education at the institution. In the framework of this strategic partnership, the university establishes the ‘Electrolux Innovation Academy’ programme package, which offers new scholarship opportunities that enable students to gain the skills and competence necessary for working at Electrolux.

Halton Clean Air

Halton Clean Air is a leading air ﬁlter manufacturing company from Finland. The decision to invest in Hungary and open a production plant in Vecses made good sense to this expanding organisation. The factory produces air ﬁlters for central European markets where the main customer segments comprise general industry, commercial buildings and hospitals. These markets are especially interested in clean indoor air as a way to protect their most valuable assets: their staff, machinery and production processes. Hungary’s ideal geographical location together with a highly skilled and motivated workforce made the choice of Hungary an easy one for Halton Clean Air.

Production at Halton Clean Air, Hungary