Page 13 - bne_newspaper_July_27_2018

Central Europe
July 27, 2018 www.intellinews.com I Page 13
Hungarian oligarch expands business empire to sportswear manufacturing
bne IntelliNews
Sportswear manufacturer Magyar Sportmarka, majority owned by Hungarian billionaire Lorinc Meszaros, a close friend of Prime Minister Viktor Orban, has signed contracts with three division one football teams and a dozen smaller clubs to supply clothing and accessories, Hungarian media reported on July 23.
Magyar Sportmarka wants to turn 2Rule into
an innovative, world-class national sports
brand, capitalising on the work of Hungarian professionals and businesses, said CEO Agnes Kovari, who owns 30% of the shares. Talentis Group, a holding company of Meszaros, holds the other 70%.
The brand name 2Rule refers to Turul, the Hungarian mythological bird of prey, a national symbol.
Meszaros, who is commonly referred to as Or- ban’s proxy, became Hungary’s second-richest man after OTP chief Sandor Csanyi with an es- timated wealth of HUF280bn (€858mn), making him a billionaire in dollar terms. Unlike Csanyi, Meszaros rose to Hungary’s business elite thanks to his friendship with Orban and through state contracts.
His business empire includes companies across all sectors, ranging from tourism to banking, industry, agriculture, retail, media, energy and the sportswear manufacturing business. As a former mayor of the small village of Felcsut, Meszaros
is also the founder and president of the football academy set up by Orban.
Viktor Orban's friend supplies shirts for his home team, Felcsut.
Magyar Sportmarka has contracts with four
local garment makers and is working on setting up its own workshop, Kovari said, but she gave inaccurate information on its suppliers and
their location. According to media reports, one company has already cancelled a contract with Magyar Sportmarka, which raises questions about the viability of the company’s plans.
At present, 20-30% of the materials used are locally made, but that ratio is expected to double within two years, and the goal is to reach 90% in three years, the CEO added.
Keeping production in Hungary may not be the most cost-efficient way of operation, industry sources say. Local garment producers outsource much of their work abroad. Among neighbouring countries, Ukraine is the obvious choice, but it
is still much cheaper to have goods produced in China or Vietnam than in Hungary, due to labour costs.
It is unusual for sports clubs to switch suppliers in such a hasty manner, pointed out some ana- lysts, who suspect that the deals struck by Magyar Sportmarka and the clubs were not solely inspired by business considerations but were rather based on political motivations.
There is no logic in replacing the products of a well-known international company with decades of research and experience with that of an unknown small company, with no track record, one Hungarian sports economist wrote on social media. In his view, the emergence of 2Rule is