RESPONSE OF MEMBERS OF THE HUNGARIAN CHEMICAL INDUSTRY ASSOCIATION AND ITS SECTOR ASSOCIATIONS TO THE COVID-19 PANDEMIC SITUATION
Commitments and donations in the public interest
The Hungarian chemical industry has an important supporting role in the fight against the COVID-19 epidemic. In this grave situation, during the past months, our industry’s top priority has been to ensure the health and safety of our employees and to secure supplies of critical chemicals and chemical products to healthcare, environmental and food supply chains. Our companies have made significant efforts to meet the exponential growth in demand for disinfectants, from the production of raw materials to the production and delivery of finished products.
The Hungarian chemical industry through the MOL Group has solved the mass production of hand and surface disinfectant products, but several small and medium-size chemical manufacturers have also significantly contributed to the elimination of the shortage of disinfectants by making maximum use of their existing capacities or by switching technological processes. And many companies have contributed to the alleviation of the shortage by supplying their employees and, in many cases, their partners with self-produced disinfectants.
During this unprecedented public health crisis, the Hungarian Chemical Industry Association and its members have also worked closely with government bodies and authorities to strengthen critical supply chains.
15 June 2020
The Company supported the purchase of special equipment for the BAZ County Central Hospital and the University Teaching Hospital in the amount of HUF 15 million, and supported the operation of the Kazincbarcika City Hospital with an additional donation of HUF 5 million.
It also donated 15,000 liters of Hypo disinfectant of its production to the surrounding municipalities to alleviate the risks posed by the epidemic in health and social institutions. In addition, it handed over 10,000 protective masks to municipalities and other partners in the area of the company’s industrial facilities.
HUNTSMAN Hungary Zrt.
Sensing supply problems at the beginning of the epidemic, the company ordered the production of a hand disinfectant based on WHO recipe, , and then donated 800 and 200 liters of it to the Municipalities of Várpalota and Pétfürdő, respectively.
KISCHEMICALS Manufacturing & Mercantile Kft.
KISCHEMICALS Kft. donated thousands of liters of its own Hypo disinfectant to Municipalities, City Operations and the Government Office of Miskolc to mitigate the risks caused by the epidemic, for desinfection.
It also allowed its own employees and their family members to use the disinfectant free of charge as well as refill it for home use.
The companies and employees of the KISS Group, operating in the Sajóbábony Chemical Industrial Park, have joined forces to fight to alleviate the health, economic and mental pressure of the epidemic caused by Covid-19 as much as possible, with a desire to help and undertake a financial role, too.
The Group does not shy away from those in need in the current situation either, so it continues to support the work of the Many Small Hand Public Benefit Association, whose mission is to promote the daily lives of sick or disabled children and adults by seeking out, collecting and donating material or financial offerings to them or to the organization or institution providing for their care. The Group also considers it important to draw attention to the benefits of a healthy lifestyle at his events. Previously, the Association entered the 3rd Miskolc-Kassa Ultramarathon running competition with 15 people (mostly employees of the KISS Group). Due to the epidemic, this competition was postponed until autumn by the organizer due to the restrictive measures introduced, but the Association organized an individual run, the “Run One Line”, keeping the team members in shape. Each of the runners made the distance between 8 and 26 km individually and documented, in the vicinity of their place of residence or on the treadmill of their home, and handed over the entry fee paid by them and the sympathizers to a seriously ill adult person for financing medical treatment.
In addition to this event, the management of the Kiss Group also donated 1,000 health masks to the Many Small Hand Public Benefit Association for handing over to the László Velkey Children’s Health Center in Miskolc, helping to provide daily care for sick children and safer contact with family members.
As a member of the Group, KISANALITIKA Kft, which provides laboratory services, produced and provided a disinfectant solution – with Chloramine-T active ingredient used for the production of one of its other products – in 10 liter packaging for the companies operating in the Chemical Industrial Park.
MOL Petrolkémia Zrt.
As a responsible company, MOL Petrolkémia Zrt. offered 200-200 liters of hand and surface disinfectant products to the Tiszaújváros municipality, the main users of which are the Tiszaújváros City Clinic and other local government institutions. In addition to Tiszaújváros, the company also thought of the surrounding settlements, so the municipalities of Tiszapalkonya and Oszlár also received from the donation. In addition, the Debrecen Chemical Vocational Training Center, the Tiszaújváros Brassai Sámuel Vocational School, the Miskolc SZC Andrássy Gyula Mechanical Engineering Vocational Gymnasium and Vocational High School, and the Tiszaújváros Eötvös József Gymnasium also received disinfectants manufactured by MOL. MOL Petrolkémia Zrt. also supported local schools with more than 1,000 medical masks so that students could write their high school graduation exams safely.
In addition to donations, MOL also places great emphasis on the protection of its employees, therefore, in addition to high-level anti-pandemic measures, it provided 2 liters of hand sanitizer for all its employees.
Zoltek Zrt. donated 800 FFP2 masks to the Vaszary Kolos Hospital in Esztergom, and 200 to the Nyergesújfalu Nursing Home. In addition, 40 closed overalls were also donated to the nursing home.
BASF Hungária Kft.
BASF Hungária Kft. has been supporting the SOS Children’s Villages Foundation since 2017. In addition to the financial contribution, Dr. Thomas Narbeshuber, the company’s managing director in Hungary and BASF’s regional manager, as the ambassador of SOS, also contributes his social capital to the Foundation’s efforts of fundraising. In September 2019, BASF also launched a one-year community fundraising program called BASF for FUN, the essence of which is that the company will double the amount of donations collected by its employees at the end of the program. The COVID-19 epidemic has also put the foster parents of SOS Children’s Villages in a difficult position, so during this period special attention is paid to cooperation and they join the Foundation’s special programs designed for the current situation not only at the corporate level, but also at the employee level.
NOVOCHEM Trading & Service Co. Kft.
NOVOCHEM Kft. – keeping in mind the safety of its employees – has redesigned its processes in order to be able to meet the significantly increased supply needs of its pharmaceutical and disinfectant manufacturing partners with high priority, without interruptions.
The company is continuously working with the Disaster Management Authority to support protection against COVID-19. In its dangerous goods warehouses, it offered some of the storage capacity to house the equipment needed for epidemic control. At the request of the authority, it promptly supplied raw materials needed to manufacture disinfectants. Protective masks and necessary chemicals were provided free of charge to its partners and authorities.
The company, with the help of its German parent company and its Western European partners, has significantly increased its imports of disinfectant raw materials, and its specialists have launched several projects to map out how they can support the epidemic in Hungary.
DONAUCHEM Chemicals Trading Kft.
The company supplied disinfectants and cleaners to its employees’ households. They could take home sodium hypochlorite and the company mixed one of the disinfectants for its own use according to the WHO recipe.
They had a public interest commitment not to reduce working hours, not to order downtime and other restrictive measures, not to send away any workers. In addition, so far they have not used any support or relief from the options put into effect during the crisis, which would place a burden on the national economy.
Hungária Dangerous Goods Engineering Office Kft. /HVESZ Kft.
In the situation created due to COVID-19, HVESZ Kft. also seizes every opportunity within its modest possibilities to help protection and defense.
Recognizing the superhuman performance of the healthcare sector and the sacrificial work of healthcare workers, the management of HVESZ decided that while continuously providing dangerous goods advisory work to contracted hospitals and healthcare institutions, its suspends the billing of the service for 3 months from 1 March 2020.
Interauditor, Neuner, Henzl, Honti Consulting Kft.
In the situation caused by the epidemic, the company granted a significant discount on its contractual fees to its customers particularly severely affected, operating mainly in the field of tourism. It has not been forced to introduce austerity measures vis-á-vis its employees, nor does it plan to do so. The company supports the Child Nutrition Foundation every year, and plans to be able to do so again this year.
HUNGARIAN PAINT MANUFACTURERS ASSOCIATION (MAFEOSZ)
PPG Trilak Kft.
The company produced in March for its own use, to ensure the safety of employees a hand sanitizer in its plant. By April, the hand sanitizer was already available through commercial procurement, when in addition to providing its own needs, it also supported the disinfectant needs of the Disaster Management, Honvéd and Ferenc Jahn hospitals, as well as the 23rd district municipality of Budapest.
In April, the company linked the promotion of washable and chemical-resistant wall paints to a charity campaign in which it transferred 2% of the price of quality wall paints purchased between April 20 and July 20 to support the Ferenc Jahn Hospital. It also invited its trading partners to join the campaign, so the value of the support is expected to exceed HUF 6 million.
EGROKORR Festékipari Zrt.
Egrokorr Zrt. also strives to be able to provide assistance in the current epidemiological situation. At the beginning of June, it supports the charity fencing of the Sárd Street ambulance station in Érd, providing the appropriate primers and enamels. The organization of this charity action is due to the Room Painting-Wallpaper National Industry Association.
The company also contributed to the renovation of the Kempelen Farkas Grammar School, donated mixed wall paintings and provided a discount to the Diósdi Kindergarten so that the external fence elements of the kindergarten could be renewed.
Room Painter – Wallpaper National Industry Association / Mafeosz
The Association has communicated to customers through its highly visited community site that there are antibacterial paints for hygiene purposes and that their use, given the current situation, can provide long-term “preventive” protection. In connection with a foreign (Canadian) youtube video, a forum was launched to facilitate the outdoor, facade and industrial orders of the painting contractors. The Association was also the initiator and organizer of the “charity fence painting” of the Érd ambulance station. The paint needed for painting was provided by Egrokorr Festékipari Zrt. and the tools were provided by Schuller Eh’klar for the work.
ASSOCIATION OF PLASTIC PIPE MANUFACTURERS
Wavin Hungary Kft.
The Dutch sister company of the plastic pipe manufacturing company, a member of the Orbia group of companies, started the production of plexiglass face shields, which it donated to hospitals and other healthcare institutions, from which Wavin Kft. will deliver them to its customers free of charge. Orbia employees have been also involved in the epidemic, which is why the company also started fundraising among the group’s employees. Orbia distributes the donation to those in need, doubling the amount of each individual donation.
HUNGARIAN CHEMICAL INDUSTRY – 2019
In 2019, the total domestic sales of the Hungarian chemical industry – net sales from the refining of petroleum, the production of chemicals and products, the production of pharmaceuticals and the production of rubber and plastic products – amounted to HUF 7,055 billion, which is 8.5% more than in the previous year. This accounted for about one-fifth, or 19.9%, of total domestic manufacturing revenue. 21.4% of the manufacturing industry’s domestic sales and 16.9% of export sales came from chemical products. Both indicators show the continued significant weight of the chemical industry within the manufacturing industry and the national economy of Hungary.
Within the “full” chemical industry spectrum according to the statistical grouping, the net sales and volume index of each industry branch in 2019 developed as follows:
Net sales (billion HUF)
(previous year = 100,0 %)
CHEMICALS & CHEMICAL PRODUCTS
Rubber & plastic & non – metallic mineral products
In the chemical industry in the narrower sense, e.g. in the production and sale of chemicals and products, raw materials account for the largest share in production and sales, and almost two-thirds of the industry’s total net sales come from sales of plastic raw materials produced by the petrochemical industry. In addition, the production of organic and inorganic chemicals, fertilizers and agrochemicals, paints and coatings, cleaning agents and industrial gas also have a significant presence in the industry – also from the point of view of the national economy.
It is also worth mentioning the acrylic fiber-based carbon fiber production in Hungary, which is the leading market factor in this particular branch of the industry in Europe with a net sales revenue of about HUF 60 billion and which falls under the statistical classification of “non-metallic mineral product”.
Regarding the development of employment and earnings, in 2019 the number of people employed in the chemical industry (NACE 20) was 15 thousand (+ 1%), the gross average incomes for blue collar workers were 16.4 and for white collars 7.9% higher than in the previous year. In 2019, the average gross incomes in the industry exceeded the domestic industrial and national economy average, in the case of the blue collar workers they were 27 % and in the case of white collar workers 20% higher than the average in the manufacturing industry of Hungary.
CHEMICAL INDUSTRY IN HUNGARY – a brief overview
Chemical industry in Hungary is an important branch of the national economy. Since 2007 it has been performing above the industrial and national economic average, contributing to the positive foreign trade balance of the country, producing 17 % of all industrial export.
Chemical industry has the largest output in the processing industry sector (17 billion Euro in 2012), producing 27 % of the added value of the whole industry of the country. Production of chemicals & chemical products (NACE 20) with an output of 4,5 billion Euro (2012) is the 5th largest branch of the processing industry sector (following automotive, engineering, electronic and food processing industries).
Since the early 1990s the industry underwent significant structural and technological changes. Its privatization has been completed, due to new investments its technological base has been renewed, the leading petrochemical companies in the country have become regional players in the Central European chemicals market.
About half of the chemical products manufactured in Hungary are exported, 93 % of them to European countries. Major destinations are (2012) Germany, Romania, Russia, Poland, Italy and the Central European region.
The chemical and pharmaceutical industries have a long history in Hungary, and so do research, development and innovation that are particularly essential now to the competitiveness and sustainable development of the chemical companies of the country. The sector has invested in this field, and operates laboratories and research centers. The Chemical Research Center of the Hungarian National Academy and the technical universities of Budapest, Veszprém, Debrecen and Miskolc are also engaged in both basic and applied research projects in cooperation with companies and/or under EU programs.
The industry is important from a social point of view, too. Although belonging to the less labor-demanding sectors of the economy, with the employment of 75 thousand people (among them 12,7 thousand in overall chemicals and 16,7 thousand in pharmaceuticals production), which amounts to nearly 10 percent of those employed in the processing industry, and with gross wages above the national average, it is considered and valued as an indispensable factor in providing employment in several regions of the country.
Hungary is a medium size country in Central Europe with good infrastructure in terms of motorways, roads and railways, and of fixed and mobile telecommunications and energy supply.
Important chemical clusters are located in three regions: Northern Hungary, Central Hungary (Budapest and the surrounding area) and Central Transdanubia.
a/ Northern Hungary: 15% of sales; focus on petrochemical and polymer production, two large companies with < 1 bn € turnover. Large presence of SMEs. Active involvement with universities in Miskolc and Debrecen.
b/ Central Hungary (Budapest and surrounding area): 50% of sales; focus on oil refining, petrochemicals and polymers; specialty and fine chemicals; pharmaceuticals. Large presence of SMEs. Active involvement with Budapest Technical University and Veszprém Pannon University.
c/ Central Transdanubia: 8% of sales; focus on fertilizers, carbon fibres and agrochemicals. Significant number of SMEs. Active involvement with Veszprém Pannon University.
STRENGTH AND WEAKNESSES
The industry has a strong petrochemical base: economies of scale, up to date technologies and environmentally conscious management practices are now characteristic for the industry. Stock exchange capitalization in Hungary is related to a large extent to chemical (and pharmaceutical) companies. Most of the Hungarian companies that have become multinational – at the regional level – belong to this sector.
Significant investments have been made to increase production capacities in view of demands from other sectors like automotive and electronic industries, agriculture and others. The geographical location of the country makes it a natural choice for numerous chemical companies, including multinationals, to cover the immediate region and South-Eastern Europe.
However, the industry is highly dependent on imported feedstock and energy sources, therefore the safe supply (and the diversification) of those resources is indispensable for its operation. High energy prices are weakening its competitiveness.
Like for the European industry as a whole, a supportive industrial policy and “smart regulation” at both the European and national level are prerequisites for the sustainability of the chemical industry of the country.
Hungary has a solid educational system, from elementary school to universities. For the past years special emphasis has been put on the teaching of science subjects at all levels of education as well as on the importance of the technical professions in higher education. This trend should be strengthened. Indeed, chemical companies are making considerable efforts to maintain and develop close relations with vocational training schools, specialized high schools and technical universities to provide the succession to an ageing workforce through the influx of young, well-trained and highly educated young people, and also to prevent the “brain drain” of professionals to industries in more developed economies.