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Hungary Engineering and Chemicals
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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