Joining forces to save enterprises

László Krisán, CEO of KAVOSZ Zrt. talked to our magazine about the situation and perspectives of Hungarian enterprises at the time of the coronavirus pandemic.

How did the different types of enterprises perform in 2019?

László Krisán
CEO
KAVOSZ

– From 2013 to 2018-2019 the contribution of small and medium-sized enterprises kept growing in terms of gross added value. Back in 2013 it was around HUF 7,000 billion and by 2018 it went above HUF 11,000 billion. There is no report on 2019 yet, but I am sure that the growth continued. In Hungary, the number of nano-businesses is the highest by far, and their position is weak in terms of both innovativeness and competitiveness.

Has the number of businesses increased or decreased recently?

– The number of enterprises grew last year, and according to the Central Statistical Office (KSH), there are about 1,800,000 companies in Hungary (500,000 firms and 1,300,000 sole traders). From these approximately 700,000 are active. The number of firms dropped 1 percent from 2018 to 2019, while the number of sole traders grew a little.

How did the food industry enterprises perform in 2019?

– After the 2008 recession, the food industry became a strategic sector, and it has received more than HUF 300 billion in funding since 2014. The export sales growth surpassed 7 percent in 2019, but the most important for the sector is supplying Hungarian consumers with groceries.

How big was the workforce shortage in last year?

– There weren’t enough workers in the last 3 years, and this is true for most sectors. On the other hand, this also means that in the current crisis situation those who lose their job can quickly find a new one in the sectors suffering from this problem.

The most the Hungarian government could do to save Hungarian enterprises is that it provides loan facilities supporting survival on the one hand, and preparation for the post-pandemic period on the other hand

What about the conditions for taking out a loan?

– Within the framework of the Széchenyi Card Programme we have granted HUF 300 billion worth of loans to applicants. In addition to helping them keep workers, the government can do the most for Hungarian enterprises by providing them with loans that help them survive and prepare for the period after the pandemic. In the Agricultural Széchenyi Card Programme, we increased the loan value ceiling from HUF 100 million to 200 million, and the Ministry of Agriculture covers all related costs and the interest rate instead of the enterprises! As for the loans that can help companies keep their workers: 9-month loans with a 0.1-percent interest rate are available – in the sectors that face the biggest threat the time length is 18 months – to businesses for paying the salaries of employees in full. The value ceiling here is HUF 750 million, and until the end of the year, no instalment and interest have to be paid.

Are you in talks with the government about how to help businesses in the current difficult situation?

– The government has taken several steps already, such as the moratorium on loan repayments, but online affairs management has also been made easier.

In your view what are those steps that the government hasn’t taken yet but it should?

– My view is that special attention must be paid to giving a helping hand to the non-food sector. The Hungarian Chamber of Commerce and Industry has already submitted several proposals about this. Nearly 5,000 non-food stores located in shopping centres have been forced to close, which have had no revenue for weeks and they must still pay for the rental and salary costs.

In what sense will Hungary’s entrepreneurial sector be different by this autumn or winter?

– Consumption habits changed very much in the last few weeks, as those who can now order groceries online with home delivery. I think that this habit is here to stay and will continue to shape retail trade. //