SUMMARY

The economic growth experienced by Hungary during the last 10 years has had a significant impact on the market demand for security equipment and services in the nation. The transition to a market-oriented economy has fueled construction and increased personal property ownership. According to the Economic Research Institute, Hungary's GDP growth rate will be approximately 5-6% in 2000/2001 with over USD 5 billion invested in construction. Both the governmental and the private sectors will be key players in constructing new hotels, expanding retail and office space and building 30,000-35,000 new homes in 2001. Unfortunately, there has also been increase in property-related crime during the last decade. Government statistics indicate that over one-half million crimes were committed in Hungary in 1999 of which seventy percent were directed against property and were valued at over USD 600 million. Both of these factors, a growing market base and increased property risk, have created a corresponding increase in the need for security products.

This report is prepared for U.S. safety and security professionals looking for business opportunities in the emerging safety and security market of Hungary. The study provides an overview of the mechanical and electronic security systems used in public and private sector, excluding military equipment, weapons, and fire-fighting vehicles.

Please note that official statistics on safety and security market are not available in Hungary. Numbers given in this report are best estimates by trade professionals.

A. MARKET OVERVIEW AND BEST SALES PROSPECTS

In 2000, the value of the safety and security market is estimated to be USD 141 million with an expected growth rate of 10-15% in 2001-2002. Budapest, the capital city and the largest urban center with over twenty percent of Hungary's total population, also has the largest incident of auto theft and burglary.

Trade professionals estimate that there are approximately 150,000-200,000 alarm systems in operation in the country (both public and private sector). Installation companies estimate that eighty percent of their clients have already suffered a burglary before purchasing a security equipment/service. Alarm systems are connected either to radio or telephone, some cases directly to the police.

The majority of homes and small companies/shops are under-protected. They have no security equipment or use only basic mechanical protection (i.e. steel bars, padlocks or an empty siren boxes).

Auto theft is a growing concern, especially in Budapest where an average of fifteen automobiles are stolen daily (a total of 11,556 in 1999). Mercedes Benz, BMW, Volkswagen and Opel, along with the Russian Lada are among the most sought-after models. Security equipment is obligatory when contracting car insurance in Hungary.

The number of international companies, banks and financial institutions has increased significantly in the last decade and with it has increased the demand for security services in Hungary. In response to this demand there are currently dozens of companies providing security equipment; property protection, monitoring, and patrol services; and money transport.

The following types of products represent the best sales prospects for the safety and security market.

Alarm systems connected to radio or telephone for single-family houses in residential areas and for small and medium-sized businesses (especially outside of Budapest);
Car alarm and monitoring systems;
Global monitoring and access control equipment for shopping centers and hotels;
Training books and publications on security, fire and information protection for trade professionals and end-users.

B. COMPETITION

Approximately 70-80 percent of the domestic market is supplied by imports. Most international manufacturers are already selling in Hungary either through distributors or their local representatives.

The 2700 registered safety and security organizations in Hungary can be divided into the following groups:
Manufacturers,
Importers/distributors, which may directly service the retailers and end-users,
Installation companies, which may provide full service design, sale, installation and maintenance of their equipment,
Safety and security service companies offering property and personal protection, transportation of money and assets, security guards, and private investigating.

Local production

There are many small Hungarian manufacturers offering wide range of products and simple security solutions. Hungary is a market leader in siren production and monitoring equipment. Locks and safes are also produced domestically. There is also a manufacturer of access control, time-attendance and car park systems. In total, local production is estimated to supply 20-30% of the market.

Imports from third countries

European products represent the majority of Hungary's safety and security imports, with Germany providing the largest share. In fact, high-end German products are very popular even if they are more expensive than those of other origin.

High quality intruder alarm systems are imported from Switzerland (CERBERUS, GUARDALL) and Germany (TELENOT). The largest foreign suppliers of medium quality electronic intruder alarms are Canada (DSC) and Israel (CROW). U.S. market penetration in the alarm system market is estimated at only ten to fifteen percent.

The majority of safes, locks, and iron fittings for doors used in Hungary are from Austria (WINKHAUS) and Finland (KASO).

Fire protection products are primarily imported from Switzerland, Germany, Austria and Great Britain.

U.S. Products

Products manufactured in the United States enjoy a good reputation in Hungary, but new-to-market firms should be aware of keen competition from third country suppliers. U.S. companies are strongest in the areas of electronic security (medium quality intruder alarms), fire detection and sensor product lines.

C. END-USER ANALYSIS

Government agencies, banks and other financial institutions are prime purchasers of safety and security equipment and services. Although many government agencies are limited by budget constraints, improved police, fire and protective services are a primary objective of the Hungarian government. Government agencies and public sectors typically procure products and services through public tender invitations.

Expanding shopping centers/retail networks are major purchasers of modern loss prevention, anti-shoplifting and surveillance equipment. Residential builders and renovators, as well as small businesses are increasingly taking security precautions and purchasing equipment. Other groups of major end-users for security equipment are hotels, public buildings, warehouses and storage facilities. The private sector generally prefers closed tender invitations or open market purchasing.

Insurance companies require mechanical protection and prefer an additional electronic safety system. Preferential premiums are often available to customers using a combination of both security measures.

Airport administration will also look for modern airport security products for the third terminal of Budapest's Ferihegy Airport to be built in the near future.

D. MARKET ACCESS

Other than products of national security and weapons or products qualified as weapons, there are no restrictions on importing safety and security equipment into Hungary.

Customs duties are applied to all products imported into Hungary. Please note that Hungary has signed an agreement with the European Union (EU) that has lowered or eliminated tariffs on products imported to Hungary from EU member nations. Products from the United States are subject to Most Favored Nation (MFN) tariffs. There is also a value-added tax (VAT) of 25% on most consumer products.

A brief list of sample tariff rates follows:

HS 8301 Locks 10%
HS 8303 Safes 10%
HS 8525 Cameras 10-15%
HS 8530 Control equipment 7%
HS 8531 Alarms 25%

Key competitive factors are price, quality and after-sale support and service. Also very important is the development of a close relationship with Hungarian representatives/distributors. Hungarian partners look to the foreign partner to provide marketing, promotional support, training and financing.

All products imported to Hungary must be tested by the relevant organizations (i.e. KERMI, the Commercial Quality Testing Institute and/or MABISZ, the Association of Hungarian Insurance companies).

Demographics &
Market Reports

Source: Factbook.net

Contact information follows.

Commercial Quality Testing Institute (KERMI)
Mr. Janos Peterfi, Managing Director
H-1088 Budapest, Jozsef korut 6.
Tel/Fax: (36) (1) 318-8284
Web: www.kermi.hu

Association of Hungarian Insurance Companies (MABISZ)
Mr. Barnabas Trunko, CEO
H-1052 Budapest, Deak Ferenc utca 10.
Mails: H-1364 Budapest, POB 236.
Tel: (36) (1) 318-3473
Fax: (36) (1) 337-5394
E-mail: info@mabisz.hu
Web: www.mabisz.hu

Economic entities wishing to establish a business in the safety and security market of Hungary must register with the responsible court of registration and must be licensed by the Chamber of Property Protection. Contact information follows.

Chamber of Personal and Property Protection and Private Detectives
Mr. Lajos Moro, Vice President
H-1068 Budapest, Dozsa Gyorgy ut 84/B.
Tel: (36) (1) 478-5151
Fax: (36) (1) 478-5152

The Communications Authority of Hungary must license telecommunication parts used in alarm systems. Contact information follows.

Communications Authority of Hungary
Mr. Gabor Frischmann, President
H-1015 Budapest, Ostrom utca 23-25.
Tel: (36) (1) 375-7777
Fax: (36) (1) 356-5520
Web: www.hif.hu

USEFUL CONTACTS:

Hungarian Association of Safety & Security Manufacturers
Mr. Karoly Barta, President
H-2131 God, Pesti ut 65/A. Hungary
Tel: (36) (20) 941-3606
Tel/Fax: (36) (27) 332-079
E-mail: kbarta@mail.digitel2002.hu

MANUFACTURERS

Arzenal Rt.
Mr. Andras Cseh, Director General
H-4461 Nyirtelek, Dozsa Gyorgy ut 123.
Tel: (36) (42) 210-799
Fax: (36) (42) 210-802
Manufacturer of electronic and mechanic protection equipment

BOVAS Vasipari Szovetkezet
Mr. Laszlo Dobler, President
H-7150 Bonyhad, Zrinyi utca 25.
Tel: (36) (74) 550-917
Fax: (36) (74) 550-905, 451-440
Manufacturer of safes, safety boxes, fire-proof cabinets

DSR Kft.
Mr. Istvan Varga, Managing Director
H-1119 Budapest, Nandorfejervari ut 42.
Tel: (36) (1) 463-7113
Fax: (36) (1) 463-7180
E-mail: office@dsr.hu
Manufacturer of electronic products for communications

Elektrotop Kft.
Mr. Laszlo Gyorgy, Managing Director
H-1039 Budapest, Kiralyok utja 132.
Tel/Fax: (36) (66) 456-515
E-mail: elektop@bekes.hungary.net
Manufacturer of monitoring equipment

Meldetechnik Kft.
Mr. Gabor Schreiber, Managing Director
H-1112 Budapest, Epitesz utca 12.
Tel: (36) (1) 204-5963
Fax: (36) (1) 204-5968
E-mail: meldetechnik@mail.datanet.hu
Manufacturer of hardware/software for fire protection and building monitoring

Microraab Rt.
Mr. Andras Czapary, General Manager
H-9024 Gyor, Monus Illes utca 47-49.
Tel: (36) (96) 510-710
Fax: (36) (96) 510-719
E-mail: vevoszolg@microraab.hu
Manufacturer of access control equipment

Perneky & Tsa Kft.
Mr. Antal Perneky, Managing Director
H-2750 Nagykoros, Gardonyi utca 5.
Tel: (36) (53) 352-100
Fax: (36) (53) 352-977
E-mail: pernaky@mail.matav.hu
Manufacturer of parts of monitoring and access control equipment

Seawing Kft.
Mr. Zoltan Palffy, Managing Director
H-8000 Szekesfehervar, Budai ut 139.
Tel: (36) (22) 510-172
Fax: (36) (22) 510-171
E-mail: palffy@seawing.hu
Manufacturer of access control equipment

Stampok Security Kft.
Mr. Istvan Stampok, Managing Director
H-1062 Budapest, Aradi utca 44.
Tel: (36) (1) 332-2904
Fax: (36) (1) 312-4635
E-mail: stampok@mail.elender.hu
Manufacturer of information and data protection software, and time locks

Solo Kft
Mr. Jozsef Vass, Managing Director
H-1196 Budapest, Esze Tamas utca 71.
Tel: (36) (1) 347-7040
Fax: (36) (1) 347-7041
E-mail: mail@solosecurity.com
Manufacturer of sirens, monitoring and intruder alarm systems

WMD Electronics Kft.
Mr. Sandor Waldmann, Managing Director
H-1116 Budapest, Temesvar utca 20.
Tel: (36) (1) 204-7740
Fax: (36) (1) 463-7251
E-mail: wmd@mail.matav.hu
Manufacturer of motion sensors

IMPORT/WHOLESALE/RETAIL:

Alarm Center Detection Systems Kft.
Mr. Peter Koszegi, Managing Director
H-1108 Budapest, Hangar utca 6.
Tel: (36) (1) 290-4330
Fax: (36) (1) 294-4458
E-mail: koszegi@elender.hu
Wholly owned subsidiary of Detection Systems, Inc. U.S.A.

Anti-Loop Plus Property Protection Rt.
Mr. Sandor Vaczi, General Manager
H-1134 Budapest, Loportar utca 14/a.
Tel: (36) (1) 340-8307
Fax: (36) (1) 349-0714
E-mail: info@anti-loop.hu
Design, sale and installation of security equipment, 24-hour maintenance

Aritech Magyarorszag Kft.
Mr. Attila Homor, Representative
H-1106 Budapest, Jaszberenyi ut 24-36.
Tel: (36) (1) 260-6922, 261-1681
Fax: (36) (1) 263-0569
Import and distribution of intruder alarms, fire alarms, access control and video surveillance equipment produced by Aritech, U.S.A.

Banktech Security Rt.
Mr. Sandor Vasony, General Manager
H-1119 Budapest, Petzval J. utca 44.
Tel: (36) (1) 204-6641
Fax: (36) (1) 204-6640
E-mail: security@banktech.hu
Money and value transportation and protection

C&K Systems (Europe) B.V.
Mr. Sandor Tomolak, Director
H-1101 Budapest, Zach utca 3/a.
Tel: (36) (1) 264-2126
Fax: (36) (1) 264-1791
E-mail: tomsa@cksys.hu
Import and distribution of C&K (U.S.A.) electronic intruder alarms, video surveillance systems, fire protection, and access control products. It also represents ADEMCO (U.S.A.)

Cerberus - Hungaria Kft.
Mr. Ivan Matyas, Managing Director
H-1031 Budapest, Nimrod utca 3.
Tel: (36) (1) 250-8686
Fax: (36) (1) 250-8687
E-mail: info@cerberus.hu
Import and distribution of electronic security equipment made by Cerberus, Switzerland.

Crow Hungaria Kft.
H-1033 Budapest, Miklos ter 2.
Tel: (36) (1) 388-6112
Fax: (36) (1) 368-9417
E-mail: valent@westel900.net/valent@mail.matav.hu
Exclusive importer & distributor of Crow Engineering, Israel products.

DSC Hungaria Kft.
Mr. Csongor Ujhelyi, Managing Director
H-1142 Budapest, Erzsebet kiralyne utja 112.
Tel: (36) (1) 469-0260
Fax: (36) (1) 469-0261
E-mail: dschungaria@mail.matav.hu
Exclusive distributor for DSC products of Canada, DELTA VISION, GYYR and PELCO CCTV systems, SAFE-LINK monitoring systems, TANE door opening sensors.

Elektro-Kod Kft.
H-5100 Jaszbereny, Bercsenyi ut 51.
Tel: (36) (57) 515-240
Fax: (36) (57) 515-255
E-mail: kod@mail.matav.hu
Import and distribution of PARADOX (Canada) alarm systems

Erando Kft.
Mr. Karoly Kandolka, Managing Director
H-1144 Budapest, Gvadanyi ut 67.
Tel: (36) (1) 383-3385
Fax: 467-3430
E-mail: erando@erando.hu
Design, sale, installation and maintenance of security equipment

Fittich Rendszertechnika Kft.
Mr. Gabor Balazs, Managing Director
H-1143 Budapest, Stefania ut 55.
Tel: (36) (1) 251-8866
Fax: (36) (1) 267-6735
E-mail: fittich.hu@mail.datanet.hu
Design, distribution, installation and maintenance of electronic and mechanic fire and property protection products

Group 4 Securitas Kft.
Mr. Sandor Kecskemeti, Managing Director
H-1139 Budapest, Rozsnyai ut 21-25.
Tel: (36) (1) 237-3200
Fax: (36) (1) 340-2524
Largest, foreign owned, security company in Hungary providing object and property protection, transportation of money and assets.

Halasz Security Kft.
Mr. Tamas Halasz, Managing Director
H-1143 Budapest, Gizella utca 42-44.
Tel: (36) (1) 363-3023
Fax: (36) (1) 383-2933
E-mail: security@halasz.hu
Exclusive distributor of KASO safes, Finland; VIRO and CORBIN locks and padlocks, Italy; and, OMEN SAFE PLACE safes for hotels, Israel.

Kotter Security Hungaria Kft.
Mr. Jurgen Rappe, Managing Director
H-1149 Budapest, Pillando utca 22.
Tel: (36) (1) 467-4130
Fax: (36) (1) 467-4131
Object protection, security guards, money and valuables transportation and protection

Masco Kft.
Mr. Nandor Juhos, Managing Director
H-1045 Budapest, Madridi utca 2.
Tel: (36) (1) 390-4170
Fax: (36) (1) 390-4173
E-mail: mascoltd@westel900.net
Web: www.masco.hu
Import and distribution of electronic and mechanical property and fire protection equipment and access control products from Europe and Asia.

Micro Alarm Biztonsagtechnikai Kft.
Mr. Istvan Lugosi, Managing Director
H-1111 Budapest, Kende utca 1.
Tel: (36) (1) 385-3337, 385-3339
Fax: (36) (1) 466-5444
E-mail: microalarm@mail.matav.hu
Import and sale of bank security equipment

Modern Alarm Kft.
H-1133 Budapest, Karpat utca 16.
Tel: (36) (1) 359-3639, 236-0622
Fax: (36) (1) 339-4602
E-mail: modern-alarm@matavnet.hu
Distribution of OPTEX motion sensors (Japan) and NITTAN fire alarms (Japan)

Multi Alarm Rt.
Mr. Laszlo Zsolt, General Manager
H-1092 Budapest, Bakats ter 2.
Tel: (36) (1) 456-3060
Fax: (36) (1) 456-3080
E-mail: multialarmbp@matavnet.hu
Sales and installation of full-scale electronic property protection

Plettac Security Hungary Kft.
Mr. Laszlo Devai, Managing Director
H-1024 Budapest, Petrezselyem utca 15-19.
Tel: (36) (1) 315-0253
Fax: (36) (1) 316-2734
E-mail: plettac@mail.matav.hu
Import, sale and installation of Plettac (Germany) electronic and mechanical protection products

Promatt Elektronika
H-1112 Budapest, Jegcsap utca 9/b.
Tel: (36) (1) 310-2385
Fax: (36) (1) 310-2387
E-mail: promatt@mail.matav.hu
Distribution of NOTIFIER and SYSTEM SENSOR fire alarms (Austria)

Riarex Kft.
H-1089 Budapest, Koranyi Sandor utca 3/b.
Tel: (36) (1) 210-0540
E-mail: riarex@mail.matav.hu
Exclusive distributor and retailer of BENTEL SECURITY, Italy and DELTAVISION, Canada

Rimi-MS Security Kft.
Mr. Bela Barothy, Managing Director
H-1136 Budapest, Pannonia utca 32.
Tel: (36) (1) 350-0402
Fax: (36) (1) 350-0432
E-mail: monitoring@rimi.datanet.hu
American-Hungarian JV for sale, installation and maintenance of property and fire protection equipment, access control, CCTV system, car alarms.

Securicor Hungary Kft.
Mr. Joseph Garrard, Managing Director
H-1122 Pethenyi ut 9.
Tel: (36) (1) 489-7050
Fax: (36) (1) 489-7055
Object protection, transportation and protection of money and assets, private investigation

Securitas Hungaria Property Protection Rt.
Mr. Peter Szabo, General Manager
H-1119 Budapest, Hauszmann A. utca 9-11.
Tel: (36) (1) 204-0200
Fax: (36) (1) 204-0198
E-mail: sechun@mail.matav.hu
Object protection, transportation and protection of money and assets

Sensormatic Kft.
Mr. Andras Orosz, Regional Director for Eastern Europe
H-1089 Budapest, Blathy Otto utca 6-8.
Tel: (36) (1) 210-9450
Fax: (36) (1) 210-0763
E-mail: officehu@sensormatic.hu
Subsidiary of Sensormatic Electronics Corporation, U.S.A. Security design, installation, 24-hour repair, consulting, and education

Spectrum Security Kft.
Mr. Ljubov Krasnenkova, Managing Director
H-1101 Budapest, Korponai utca 4.
Tel: (36) (1) 260-1908
Fax: (36) (1) 260-1909
E-mail: spectsec@matavnet.hu
Design, sale and installation of security equipment

Trioda Biztonsagtechnika Rt.
Mr. Zsolt Odor, Director General
H-1183 Budapest, Gyomroi utca 79-83.
Tel: (36) (1) 296-0700
Fax: (36) (1) 296-0701
Importer of EUROCAR 25, ENFORCER car alarms, VISION central locks, PARADOX, DSC alarms for homes, BENTEL signals, anti-theft products, and 24-hour monitoring systems. Full security service (design, installation, maintenance, and training)

TRADE PROMOTION EVENTS

Participation in trade shows and seminars is recommended. Use of professional magazines and trade journals is also an effective tool for informing the Hungarian market about your product.

Security & Safety Hungarian Security Conference and Exhibition
November 8-11, 2000 Budapest, Hungary
Contact: Elitexpo Kft.
Mr. Sandor Kadar, Managing Director
H-1056 Budapest, Belgrad rakpart 22.
Tel/Fax: (36) (1) 266-6331 or 318-3710
E-mail: eexpo@mail.matav.hu

Banktech 2001 International Exhibition of Bank Security
April 24-26, 2001 Budapest, Hungary
Contact: Ms. Judit Stefko Vermes, Managing Director
H-1026 Budapest, Szilagyi Erzsebet fasor 79.
Tel/Fax: (36) (1) 356-6581 or 212-0056
E-mail: congress@congress.hu

Securex 2001 International Trade Exhibition of Security
April 3-6, 2001 Budapest, Hungary
Contact: Ms. Judit Toth, Exhibition Director
H-1101 Budapest, Expo ter 1.
Tel: (36) (1) 263-6901
Fax: (36) (1) 263-6098
E-mail: securex@hungexpo.hu

Magazine:

Magyar Biztonsagtechnika (bi-monthly)
Mr. Istvan Toth, Editor
H-1046 Budapest, Szekpatak utca 12.
Tel: (36) (1) 435-0610
Fax: (36) (1) 435-0609
E-mail: mbt@mail.matav.hu