Cooperation between companies can widen the market
Gyula Szűcs, one of the Group's principal owners, led HUNÉP Zrt. until the end of 2018, when he decided to leave operational work to the younger colleagues developed over many years and to concentrate — together with a few talented specialists — on a new task: active asset management. – We assessed that, as Debrecen's regional role strengthens, demand keeps emerging in the property development market. Some of that is housing demand, some is for expanded accommodation, some for industrial and logistics development, and some aimed at expanding industrial capacity. Knowing the city's role in healthcare and the health industry, I see a chance that within a reasonable period the health industry too may seek a development partner – said Gyula Szűcs.
Asked by Figyelő whether the potential health-industry demand he outlined might relate to the planned national vaccine plant, the businessman explained that this too may arise, but that a developer may also be needed to realise numerous other ideas, where players in healthcare have a marketable service but lack the infrastructure to deliver it. – When I mention this I do not mean only the building itself, but also procurement and providing the equipment for the activity that well-qualified specialists want to offer there as a service – he explained.
The Group's market prospects — and above all those of HUNÉP Zrt., which generates the overwhelming share of revenue — are shaped not only by the demand for development and construction capacity already under way in Debrecen and likely to intensify once construction of the BMW plant begins. They must also reckon with the economic and administrative effects of the COVID-19 pandemic, which raise numerous questions. – Fortunately the pandemic has not greatly affected our construction work on a day-to-day basis on projects in progress. Our projects were completed on time and delivered, and those currently under way are proceeding to schedule. I do see risks in the near future, however, in that the decisions that give us work and market opportunity are being taken a little more slowly and with more difficulty by both state and private investors than before, and the number of tender calls is falling. I trust all this will become manageable within a year, that a vaccine will be available shortly, that the downturn caused by the pandemic will fade, and that the projects in our sights will soon get under way.
Szinorg, and the Group's construction flagship HUNÉP, have considerable experience in handling the investment sensitivity and seasonality that characterise construction, so they have good reason to believe they can stay on their feet in the present situation too. Their current operating model — which has proved crisis-resistant so far — was formed during the 2008 crisis. Reducing the company's directly employed headcount, they began operating as a main contractor and engineering practice, while employees first moved into independent companies and later transferred their activity into businesses they founded themselves. They also narrowed their area of interest: ending the earlier practice, they stopped taking on work hundreds of kilometres away and instead strengthened their presence around Debrecen. – Time has proved us right; we could and can operate successfully in this model, which is why the same arrangement holds today at Debrecen-based HUNÉP Zrt. and at Budapest-based HC Építő Kft. Szinorg is also open to manufacturing that serves the construction industry: one such company, producing aluminium curtain walling and windows and doors, recently won the maximum EUR 800,000 of support in a call issued by the Ministry of Foreign Affairs and Trade under the growth programme. Under it they are building a new production hall, into which an entirely new and outstandingly efficient technology will be installed.
In contrast to the slowdown visible in construction contracting, there is no let-up in the property development projects. Gyula Szűcs put it this way: – The developments we decided on two years ago we will certainly carry out. The pandemic has no effect on them; we are moving ahead, the property acquisitions for the developments are going through, the studies are being prepared, the design work is proceeding, and within a foreseeable period the first ground will be broken. The simple reason is that property development can only be done by thinking long term — and we have always thought long term.