Interview with Kovács Károly György, Eszat KFT., Hungary

It all began in 1985, when Kovács Károly György’s father became the general director of state-owned Agroker Nyíregyháza, one of the 18 Hungarian companies that supplied farmers with input products such as chemicals, fertilizers, machines, spare parts, and general gardening equipment. At the time, socialist policies did not allow private companies to work in the agricultural sector. In 1989, Hungary began to transition into a market economy to accommodate political change. György’s father’s talent for entrepreneurship made him one of the biggest shareholders of the newly privatised Agroker Holding, which retained all its employees and routine activities. At that time, Kovács Károly György was just 16 years old, in high school and focusing on his studies. In 1994, Agroker Holding acquired an apple processing company. Today, Eszat is the largest company of its kind in the country, it is also run by Kovács Károly György.

Tharawat spoke to György about the Hungarian business landscape, his father, and the importance of professionalism.

What industry changes have you observed over the past two decades?

The degree of professionalism is one of the greatest changes. Twenty years ago, we had to learn everything about the market and its behaviour. We had to learn about the buyer’s intentions, and what influenced their decision-making. We had to discover the meaning of marketing. It took time, energy, trials, and faults for us and for our competitors.

It was hard to understand and take advantage of the new possibilities. This was where my father’s strength lay. He was able to utilise his people skills, talent for sales, and ability to spot the right business openings to capitalise on these new opportunities. Unlike the other players in the European business sector, we knew the Hungarian market. These players had to collaborate with us in order to know about the newly opened market. The challenge was finding the balance between keeping our independence and utilising the enormous sales experience of multinational companies. These were very interesting, exciting, and colourful years. Now Hungary is a member of the EU and is strongly committed to becoming a land of successful people.

 How did you establish Eszat?

Agroker Holding was dedicated to agriculture, which is one of the leading industries in Hungary. There are endless opportunities in agriculture. The land cannot be uncultivated. It needs input materials and requires machines from season to season.

In 1994, we bought an apple processing company, Eszat Ltd, which just celebrated its 20th anniversary. It is now the biggest privately owned apple processing company in Hungary. Some of the employees that were working when we took over are still with us today. The move to acquire this company was tactically important. It was one step towards my father’s great vision to increase private capital over the years.

 What is your leadership practice?

My father always maintained leadership roles in the company. He had a business partner when he founded the company and they remained together for a very long time. My father was the CEO and his partner was the Chief Operating Officer. They had the biggest shares and played active roles in managing the company. They did not really allow other managers to make many independent decisions. They controlled the decision-making process when it came to operative tasks, sales, and marketing, leaving only executive roles to the managers. They only believed in their own decisions. We have to take into consideration that my father and his partner founded the business right after privatisation and were not able to be forward about their status within the company. There is no absolutely right approach to building up a successful business, and there were many pros and cons to this method.

I have other notions about leadership. I believe a good leader has to give more space to managers and employees to make decisions in their field of work. Otherwise, they will loose out on the feeling of success, which is a driver in the business world. Everybody knows that a motivated, successful, responsible person can lead a business towards target goals. This is how I try to manage Eszat Kft., of which I have been the General Manager since 2013.

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What do you think are the main challenges and opportunities for privately owned companies in Hungary?

Today, it is becoming more and more difficult for private companies to maintain the same profitability from year to year. The differences between competitors are minimal regarding offered products and quality at the same price level. Big companies are able to get the market share because they have very strong capital and can therefore run for years at a minimal level or without making profit. In my opinion, one of the best ways to profit is to specialise. If you are a business professional and have a special solution, then you have a competitive advantage for a specific amount of time. In this time, you can create a new market and product that become the beginning of your own company’s life cycle.

Tharawat Magazine, Issue 27, 2015