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Hungary-Engineering and Chemicals

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Hungary Index

Throughout the postwar period, the engineering and chemical branches have been the most important in Hungary's industrial sector. The engineering sector employed about 32 percent of Hungary's industrial workers in 1986 and produced 25.5 percent of the country's total industrial output; the chemical sector employed 7.5 percent of the industrial work force and accounted for 19 percent of industrial output.

Hungary's vehicle-manufacturing subbranch emphasized production of buses and axle housing and accounted for about 28 percent of the engineering branch's output in 1986. Comecon assigned production of large buses to Hungary in the 1950s. Hungary's Ikarus bus enterprise became the world's fourth-largest bus producer, accounting for about 20 percent of the world's bus exports in 1980. The engineering branch also produced tractors, diesel locomotives, river vessels, floating cranes, machine tools, passenger elevators, batteries, telephone equipment, lighting equipment, and other products.

The chemical branch grew faster than any of the other branches after the 1960s, and in 1986 the chemical branch's 133 enterprises accounted for 19 percent of industrial output. Its main subbranches produced fertilizers, pharmaceuticals, and petrochemicals. The pharmaceutical industry was more than a century old and accounted for 1.5 percent of world production. Hungary ranked second to Switzerland in per capita pharmaceutical exports and fifth in the world in overall pharmaceutical exports. It was also Comecon's largest pharmaceutical supplier. Pharmaceutical production expanded at a nearly 18 percent annual rate since 1960, satisfying 80 percent of Hungary's market. Western markets purchased 40 percent of Hungary's pharmaceutical exports. In 1986 the pharmaceutical industry's output totaled about US$513 million.

Rapidly rising demand for synthetic materials and a desire to replace imports with domestic production prompted Hungary to begin developing a petrochemical industry on the eve of the 1973 oil crisis. The project, which required significant investment and integration with the Soviet economy, proceeded despite the changes that the oil crisis brought to the market. In 1989 five Hungarian refineries produced petroleum products, but four were too small to take advantage of economies of scale. Analysts expected a large portion of Hungary's refinery capacity to remain underutilized until sometime in the 1990s. The synthetic-fiber, chemical-additive, and phosphorus-fertilizer branches were especially problematic.

Data as of September 1989

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