Letters are pouring into our editorial office from our readers who have been inundated with unsolicited Chinese webshop shipments, with a story similar to the one of our colleague who was taken to court: our colleague did not ask for it, but still received a package and paid HUF 13,000 for a not-so-smart watch. He has since received his money back after visiting all the branches of the network of Hungarian-Chinese-Hong Kong-Romanian companies. (Readers who were entangled in another company’s network also came forward.) Several reported that they did not even suspect a scam, since the package arrived with the Magyar Posta’s MLP van.
These are our readers to whom the notification about the unsolicited package was sent by European Chinese Supply Chain Zrt. (ECSC). We have since learned about the company, that they are only logistics service providers, they have nothing to do with the contents of the shipments. This company, or more precisely, the position offered in it, with the 150,000 HUF monthly honorarium, caused a “mother of a bitch” tantrum. Vince Szalay-Bobrovniczky from Deputy State Secretary (ie Ákos Hadházy became public property through his position as an independent parliamentary representative). The potentate’s request could be raised in such a way that the state would have to delegate a representative, since one of the owners of ECSC Zrt. is a subsidiary of Magyar Posta Zrt., Magyar Posta Vagyonkezelő Zrt.
The latter originally founded ECSC Zrt. together with two Chinese logistics companies with a share capital of three million euros. The agreement on the Chinese-Hungarian joint venture was signed in November 2017, at a monstrous event in Budapest, at the business forum of the China-Eastern-Central European Summit. At the start, the Post and Shanghai-based ZTO Express owned 35 percent each, and Ningbo Talents IT Co. Ltd. had a 30 percent share. , the sales revenue was already more than seven billion forints, according to Opten’s database.
In the meantime, the ranks were rearranged, in 2020 Ningbo Talents left the Chinese business partners, so Magyra Posta and ZTO became 50-50 owners, until ZTO also left, i.e. the Hungarian state-owned company became the sole shareholder of the company from July 2021. Amidst the great movements, two capital reductions took place at ECSC Zrt., and as a result, its share capital decreased to 450,000 euros. The change in the ownership structure was partly linked in the press to the fact that from July 1, 2021, goods from outside the EU with a value of less than 22 euros will no longer be exempt from VAT, and customs must also be paid. Therefore, low-value products ordered from third countries, such as China, became more expensive, which did not help the implementation of the ambitious plans, whereas ECSC, according to its website, strives for no less than, as a central-eastern European and Balkan regional center, the logistics of Chinese-origin e-commerce shipments become a key player in its market. This vision is based on the fact that e-commerce shipments from Asia, especially China, have increased significantly in recent years. Hungary’s excellent geopolitical location creates an opportunity to take advantage of the country’s capabilities to gain market share in the international e-commerce logistics sector, according to the company’s website.
Magyar Posta Vagyonkezelő Zrt. did not remain alone for long, a Chinese-Hungarian joint venture, European Post Service (EPS) Kft., joined ECSC Zrt. in October 2021. And in the following year, the exceptional performance already came, in 2022 ECSC Zrt. achieved a revenue of 17.7 million euros, and at the general meeting it was decided that a dividend of 450 thousand euros will be paid out of the 510 thousand euros after tax profit in proportion to the member shares. The majority, 60 percent, belongs to EPS, so the Chinese-Hungarian joint venture received 250,000 euros from the dividend, and the postal subsidiary, which owns 40 percent, received 200,000 euros.
The Hungarian owner of Sino-Hungarian EPS Kft. is LAC Holding Zrt., which is the honorary Kazakh consul, László Horváth belongs to his interests, the other 50 percent owner is the Chinese-owned CECZ Central European Trade and Logistics Cooperation Zone Kft. The name of CECZ is familiar from the ventilator business: it acquired protective equipment, masks and ventilators during the Covid-19 for a total of HUF 11.8 billion.
Since then, the CECZ group has become the protagonist of an even bigger project: at the end of October 2021, it was announced that a warehouse base would be built in the E-commerce Logistics Park in Vác for HUF 27 billion, and the government classified the project as an investment of major importance from a national economic point of view. It was not only about construction and hyper-super robotized warehouse investment, but according to information from Magyar Narancs, they bought the company that operates the industrial park, and even bought a lot from the area of the industrial park. In addition, it was also reported in the news that a warehouse for storing batteries and battery raw materials is being built on 15,000 square meters. Last summer, at the building’s groundbreaking ceremony, it was about a HUF 25 billion logistics smart warehouse, but the importance of the matter is shown by the fact that Mihály Varga Minister of Finance participated in the event and spoke about the investment as an important element of the government’s policy of opening up to the east. It is already this year’s news that the warehouse is expected to open in the fall – at least this is what the Vác city government learned from the CECZ representative at the beginning of the year.
We contacted László Horváth to find out
- how did LAC Holding get into Magyar Posta’s parcel delivery logistics business?
- How did the Chinese business relationship come about?
- What does LAC Holding provide in the joint venture and in the package delivery company ECSC?
- How do they realize the goal of ESCS becoming a dominant player in Chinese e-package distribution in the region, and what Chinese companies and organizations are they in contact with?
- What growth plans do you have in the mail order market for the next few years?
However, the honorary consul cut our interest short, only stating that ECSC Zrt.’s goal is to forward e-commerce shipments from China to recipients in Hungary, as well as deliver shipments to recipients in other European countries. Anyway, the questions “are all subject to business secrets,” he added.
Nominated Honorary Consul of Kazakhstan
Already during the first Orbán government, in 1998, László Horváth was the Kazakh honorary consul, one of those “amateur” diplomats who do social work in Hungary for the citizens of the states that commission them. He owned a company called LAC Holding and was also interested in several Kazakh-Hungarian joint ventures. At the time, the summary of the HVG called his case special, considering that the entrepreneur was nominated to be the Kazakh honorary consul in Karcag, the “capital of Great Britain”. All this is because the Kazakhs generally accept the historical view held by many in Hungary as well, that the Kunis and the Kazakhs are actually scattered members of the same ethnic group – the weekly interpreted László Horváth’s explanation. Horváth’s work was held in such high esteem that he even got a seat on the board of the government bank, the Magyar Fejlsztési Bank, during the first Orbán government.
The Kazakh thread was broken for a while, as Horváth was stripped of his honorary consul title in 2006, the course at that time did not claim his work, but he got his title back in 2012 and has been active ever since.
LAC Holding has invested in many sectors, from agriculture to security. For example, he was interested in the operator of the Széchenyi garden restaurant in Városliget, but he rode the Hungarian trading house boom at the time, and in 2013 he established the Kazakhstani Magyar Kereskedőház Kft. He has steadily increased his company empire over the years, he has long been referred to as a billionaire businessman – his railway transport company, CER Hungary Zrt., for example, achieved an annual turnover of more than 9 billion in 2022 – he did not appear on the rich lists, however, as asset appraisers have so far not found enough assets for this in the balance sheets of the company network . If he made it into the elite, if not, Horváth is a part of important investments, he still has no shortage of government relations, and he appears to be one of the main actors in Hungarian-Chinese deals. Among the state-owned companies, it not only does business with Magyar Posta, LAC Holding also has a joint venture with, for example, the state-owned railway company, MÁV-REC Kft. has played a role in the industrial and logistics development of the Záhony area, the purpose of which is to serve mainland Chinese container traffic, and in the consortium the cooperating Chinese company here is CECZ.
Tags: Chinese courier post office Kazakh honorary consul ventilator business
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