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HUNGARY FOR GROWTH
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• Hungarocamion, Hungary's stateowned haulier has 1,700 trucks — one of the biggest fleets in Europe. It has run as a private company without government subsidy since 1966 and is expanding into the West, through joint ventures and acquisitions. It plans to score when Europe's barriers come down in 1992.
Gyorgy Varnai, commercial director of Hungarocamion, says the company has established three Western enterprises in the past year: Peklar Transport of Austria, with a fleet of 60 trucks; Eurocar, a joint venture with Italian businessmen headquartered in Trieste, with 20 trucks; and Hungarocamion Luxembourg, a limited liability Hungarian/Belgian partnership with 40 trucks.
The campaign to position itself in the Single European Market (SEM) is expected to continue this year when the company converts its offices in London, Paris and Hamburg "to full commercial status, meaning they will operate as separate trucking companies under the rules of those countries", says Varnai.
Concern about how non-EC, nonwestern European countries will be treated after 1992 is at the root of this expansion: "1992 is a very complicated question," says Varnai.
"According to our knowledge, almost nobody knows what will happen to third countries. There is concern that those participating in the Community will make decisions that are favourable to themselves and very difficult for third countries such as ours.
"The dream, of course, is that we will be allowed one day to go to western Europe and conduct business without any restrictions," he continues, "and that we could liberalise our market here so that we could practically offer the same terms and conditions to foreign truckers."
"The dream of dreams," adds Peter Krausz, director of new ventures for Hungarocarnion, "is that we can one day join the EC like Turkey."
Hungarocamion was founded by the Government in 1966 to handle Hungary's expanding import and export business in Eastern and Western Europe. The initial investment was 350 ageing Eastern European-built trucks, the offices of a former sovernment-run truck line and some operating cash. Since then Hungarocamion has not received subsidies from the Government, and has been run like a private company, says Varnai.
The fleet today numbers 1,700 heavy trucks. The company employes 5,500 people, 3,300 of whom are drivers. Income last year was about £.73 million making Hungarocamion one of the top 10 — hard currency earners in Hungary.
RABA TRUCKS
Roughly half the fleet consists of Hungarian-made Raba trucks, which are built in Gyor and exported to China and the Middle East, particularly Syria and Iran. The other half of the fleet is made up of Mercedes, Ivecos, Volvos and Renaults; a point of obvious pride for the Hungarian truckers: "The Mercedes is obviously the best," says Varnai, "But the drivers prefer the Ivecos."
A good measure of the company's growth can be seen at the Hungarocamion terminal at Mosonvagyarovar, one of its gateways to the west near the Austrian and Czechoslovakian borders.
In 1979, says Jeno Tranta, manager of the site, 39,000 Hungarocamion trucks stopped at the border terminal on their way into or out of Hungary. Last year, the figure was 72,000. In addition, 5,400 trucks from other companies stopped to use Hungarocamion's new services, which include import customs clearance, issuance of transport permits for Hungary and backloads from both western Europe and Hungary.
"It's a busy place night and day," says Tranta. "We will be even busier with our new services. We have telexes arriving every three hours from London and Brussels on backloads, and we can also provide information about backloads in Hungary — not just for our drivers, but as a service for others."
Last year the company established a separate freight forwarding company, Hungarocargo, which is run by a former top executive of the trucking company, Erno Peto.
According to Peto, the forwarding business in Hungary is booming, following a decision one year ago by the Government to allow any company, not just a few large trading companies, to engage in the import business.
"Many of these smaller import companies need our expertise in arranging the transport," says Peto. "We think we have the right service at the right time."
Hungarocamion has also established a domestic motor carrier, Transcamion, which has a fleet of 120 trucks, but poses no threat to the larger state-owned domestic trucking company, Volan: a virtual institution in Hungary. Volan operates 20 companies, two in Budapest and one in each of the 18 counties of Hungary, and has a fleet of more than 12,000 trucks.
NAGYKOROSI PLANT
"rhe jewel of the company's diversification, however, is a modern for-hire maintenance and repair base in Budapest. The 110,000m2 Nagykorosi plant was built in 1985, and is already among the 100 most profitable enterprises in Hungary. It handles the maintenance of Hungarocatnion's Mercedes, Volvo and Renault trucks, was built with partial funding by MercedesBenz, and is the only authorised repair shop for their products in Hungary.
Hungarocamion trucks come into Nagykorosi, and the larger, but older Chinkotai site across town that handles repairs on Iveco and Raba trucks, every 15,000 kilometers for an inspection. Police authorities recently began accepting the inspections at Nagykorosi as official.
Scheduled maintenance is conducted every 30,000 kilometers (9,000 miles) and at 180,000 kilometers brakes are completely rebuilt and a fresh coat of green, red and white Hungarocamion colours are applied. The average useful life of trucks in the fleet, says manager of Nagykorosi Janos Schrotti, is between 700,000 and 800,000 kilometers, (435,000 to 495,000 miles). "After 800,000 kilometers, it is no longer economical to maintain the truck," says Schrotti.
Hungarocamion trucks average about 122,000 kilometers (76,000 miles) a year, with an average life of about six and a half years.
The workhorses of the Hungarocamion fleet are the Raba 300, 320 and 370, and the Mercedes 1633 and 1636. They also use the Iveco 330 and 360, Volvo F12 and F16, the Renault R340 and R360, The company is testing three Czechoslovakianbuilt Liaz 380s.
Because nearly 15,000 work orders are filled each year at Nagykorosi, a fournumber code for work and parts is used. The company hopes to have the system computerised within a year.
Hungarocamion has applied for a $6 million loan from the World Bank in Washington to build a 410-terminal system to link all of its offices.
"It's part of a modernisation programme we began three years ago," says Imre Wittek, who is heading up the computer project. "We realised that the company had reached a size that we needed computers to remain competitive, especially for 1992. We went to the World Bank for the loan with the idea of improving our management of the company, our marketing functions, and to build a European-level information management system."
Hungarocamion has the potential to compete on that level. It's network includes offices in London, Paris, Milan, Hamburg, Malmo, Sweden, Rigeka and Koper in Yugoslavia, Moscow, Istanbul and Teheran.
"This network is very important to us, not only in terms of representation, but to allow our customers to track their shipments," says Varnai.
Hungarocamion is the best positioned of the Hungarian trucking companies to take advantage of the economic union of western Europe. It's services include regular route services between European industrial and commercial centres and the Middle East; transportation of exhibition goods and equipment; refrigerated trans port (nearly 400 units); specialised units for transporting wine, beer and hanging garments; and equipment for bulky and oversize loads.
"Hungarians would like to compete, but 1992 is only three years away, which is a very short time for many of our members," says Aliz Kovacs. He is director of the Hungarian International Road Haulage Association, which has 250 members, many of them are small private companies with fewer than four trucks. "All our members, from Hungarocamion down to the smallest, want more information on 1992. We need to do a better job of educating Hungarians for the single market."
A first step was taken this summer when Hungary hosted a symposium on the 1990s and "the opportunities for countries not belonging to the EC in general, and Hungary in particular." The meeting was attended by EC officials and most of its member states, and resulted in an invitation to Hungary to send a representative to Brussels to get more information.
The Hungarian Minister of Transport has also been granted "observer status" within the Council of European Ministers of Transport and will host the next meeting of the CEMT in Budapest this September_ At the same time, the Hungarian Government is making efforts to harmonise many of its road transport and customs regulations with those of the EC; a prerequisite for greater participation in the western European market.
GOVERNMENT OWNED
The liberalisation of the market, which is already the most liberal of the EasternBloc countries, may soon extend to the big government-owned enterprises, such as Hungarocamion. According to Varnai, a measure to allow for privatisation of these enterprises is being seriously considered in the Hungarian Parliament.
"We would have to resolve the question of ownership. Do we want to be a shareholding company? With just domestic or domestic and foreign capital? No decision has been made," says Varnai.
Hungarocamion is already experimenting in the private sector; not only with its western European operations, but with profit centres in Hungary itself. It has also asked a large western accounting firm to come in and begin converting "the book-keeping process to the western system," says Varnai.
Privatisation is an idea that appeals to the officials by Commercial Motor interviewed. But it's unclear exactly what changes would be made to the services or the way Hungarocamion does business if it became a private enterprise.
Since its founding, Hungary's international motor carrier has been run like a private business. If privatised, it would simply operate as a private company. El by John Parker