From farm boy to corporate leader, Ákos Szabó's journey is a tapestry of diverse experiences. He navigated combine harvesters at 10, procurement departments at 30, and entire companies at 40. Szabó's career parallels Hungary's economic transformation, from the twilight of its sugar industry to the dawn of modern procurement practices. His adventures span continents and contexts – evading danger in war-torn Croatia, brokering pea deals with Japan, and even sourcing condoms for a national oil company. As a successful and respected manager, he decided to leave behind a secure, well-paying position to pursue his goals as an entrepreneur. In Part II of our life journey interview, we asked Ákos Szabó, CEO of Fluenta Europe, about the path that led him to this point. (We revisited the early days in Part I.)
Last time, we left off at the beginning of the Yugoslav Wars. Those were quite the eventful times, weren't they?
Yes, indeed. In Belgrade, for instance, the company's truck was literally robbed, with several hundred tons of sugar disappearing without a trace. The company eventually went bankrupt. Of course, anyone living in Baranya knew exactly what was going on. Osijek was under constant shelling, and I didn't live far from there. It was common for me to hear artillery fire. When that happened, I'd go out onto the balcony and lick my finger to check which way the wind was blowing. If it was coming from the south, I'd go back to bed. If it was from the north, I'd head straight for my always-fueled car and take off.
What was the significance of the wind direction?
If the wind was blowing from the south, I knew it was just carrying the sound, not because they were close. When the shelling was intense, you could see yellowish spots on the horizon – muzzle flashes. I visited Osijek back then, and it was shocking to see the city blown to pieces. I had a colleague from Osijek who told me that once, when he returned to the office after an air raid alert, he found a piece of shrapnel right next to his computer monitor – had he been at his desk, it could have ended up in his back. It was an incredibly tough period.
I remember this one incident during a family vacation. We were driving along roads I thought I knew well, and I decided to take what I assumed would be a handy shortcut. Well, I was in for quite a shock. Even though the war was officially over, we suddenly found ourselves face-to-face with what they call "dragon's teeth" [anti-tank barriers – ed.]. There was enough space to drive between them, but we were terrified. There I was, with my wife and kids in the car – what would happen if I turned back? What if they opened fire at us? In the end, I drove forward at a snail's pace, until I finally spotted the UN sign. Seeing that United Nations sign was like a weight lifting off our shoulders.
You spent almost the entire '90s in agriculture.
Yes, after this, I went to work in sales for a company called Alfa Laval Agri, which was part of the dairy industry. So it was still sales, but I practically let go of foreign trade. There were five of us in this position at the company, and everyone was assigned a region of the country they were responsible for. I was given Southern Hungary. We had to travel a lot, in those years I drove an incredible amount, we practically lived on the road. Every week I burned through at least four tanks of fuel.
Our official title was Sales Support Manager, which meant we weren't supposed to sell directly. However, the local area representatives weren't up to the task, so we essentially handled most of the sales. We issued the quotes, we negotiated, and they just finalized the deals. It was exciting from the perspective that this was the first time I got a company car, and the first time in my life I had a mobile phone, which was built into the car. We received Benefon's most expensive model, which was the most powerful because cell towers were still rare back then. The device could be removed and used up to 100 meters away from the car. This was a big deal at the time, but it was also terribly expensive.
The mobile phone itself cost 190,000 forints, equivalent to roughly 10 percent of the company car's value. It's a detail that might escape many people's memory now, but in those days, we even had to pay for receiving calls. My monthly phone bill could sometimes hit 60,000 forints – the same amount as my monthly salary.
I imagine this job offered you a lot of freedom?
On the surface, it might have seemed that way, but the reality was different. As a family man, leaving at dawn and returning late at night wasn't ideal. I also disliked having to stay in hotels. That said, I truly enjoyed the work and gained invaluable experience. Eventually, though, I reached a crossroads where I needed to reevaluate my career path.
I had a wake-up call in the form of a car accident on the road between Hódmezővásárhely and Szeged. I'd returned home extremely late the previous night and had to be up again at the crack of dawn, leaving me exhausted. While fortunately there were no major injuries, the incident shook me to my core. I realized I was entirely to blame, and that such a simple error wouldn't have occurred had I been properly rested. As I stood there by the roadside, it hit me: this job would put me in an early grave if I didn't make a change.
And you started thinking about your next move.
Yes. I began browsing job ads in HVG [a leading Hungarian economic magazine – ed.]. One sugar factory operating company was looking for a procurement manager. This profession practically didn't exist in Hungary at that time, but I applied anyway. It was an interesting interview. They asked questions I couldn't possibly have known the answers to. How big is the company, what's its turnover, what's its procurement volume, what do they buy, things like that. Today we can easily look up this information online, but back then you couldn't find such info almost anywhere. So, for lack of a better option, I gave estimated numbers that I calculated on the spot. In the end, I wasn't far off in any case, and as it turned out, my answers were better than they had ever encountered. Obviously, this was partly due to my engineering studies and partly due to my experience. So they hired me.
It certainly worked in my favor that I was already studying at the University of Economics, a program I'd begun during my time in sales. My boss hadn't been thrilled about my decision to study while working, but I stood my ground. This was one area where I refused to compromise, and ultimately, he came around to accept it.
Your new role shifted you from sales to procurement – the "other side" of the equation. It might sound odd today, but are we right in thinking this wasn't even considered a distinct field back then?
We have to consider the context of the pre-1990 shortage economy we started from. Back then, procurement was essentially about having a shortage, jumping in your Barkas van, and scouring every warehouse to find the missing item. In that world, the idea of cost-effective purchasing was practically non-existent. You were just relieved if you managed to find what you needed at all.
Did the Hungarian branches of multinational corporations introduce this business practice then?
That's correct, in essence. I joined a French-Italian corporate group. In their operations, procurement was already a well-established field. They recognized the significant spending on procurement in Hungary and decided to create this role here to address it.
Western firms operating in Hungary at the time had an interesting pricing strategy. Contrary to standard economic practice where bulk purchases usually come with discounts, they were selling larger quantities at higher prices than in their home countries.
How was this possible?
At that time, Hungarian company leaders simply didn't understand how to do this properly. At this company, I produced such numbers in one year that even the managers could hardly believe it. Yet I did nothing else but take the procurement area seriously.
I recall a telling incident with a keen entrepreneur who was bidding on one of our tenders. He was desperate to win but didn't offer the best price. When he lost, he was furious, insisting that it was impossible to sell the item at the winning price and accusing someone of dishonesty. Fast forward six months, and he burst into my office, effusive with gratitude. I was puzzled until he explained. He'd learned from our tender that the product could be purchased at a much lower price than he'd believed possible from foreign suppliers. This revelation changed his negotiation tactics with importers, leading to a doubling of his turnover. It was a perfect example of how the new procurement practices were reshaping the market.
During this period, arbitrage presented significant opportunities. Savvy operators who could capitalize on these market inefficiencies found their businesses booming.
You mentioned the company was in sugar production. That was a turbulent time for Hungarian agriculture and the sugar industry in particular, wasn't it?
Indeed it was. We were witnessing the birth of new industry structures. Some factories were clearly doomed from the start. The media covered this extensively, but few truly grasped the reasons behind these changes. In my view, a more straightforward communication approach would have been beneficial. The truth is, beet sugar production in Europe dates back to the Napoleonic Wars. Napoleon's high protective tariffs made sugar cane imports unfeasible, giving rise to the beet sugar industry. However, this industry was never truly competitive on its own merits. It always required some form of state subsidy just to remain viable.
The situation was further complicated by Hungary's climate constraints. Our sugar factories could only operate for one month each year, sitting idle for the remaining 11 months. Compare this to Brazil, where sugarcane flourishes for three years, allowing for a 10-month harvesting period annually. After that, they simply replant. Their factories experience minimal downtime compared to ours. This stark difference in operational efficiency made us utterly uncompetitive in the global market. It was primarily this factor that led to the collapse of the Hungarian sugar industry.
By early 2001, you had moved to MOL, Hungary's leading oil and gas company.
I came across this opportunity in another HVG job listing. Funnily enough, I was a late applicant – the team was practically formed already. This led to a widespread misconception that I was hired due to a personal connection with the boss. In reality, it was my prior procurement experience that landed me the job.
My role encompassed two main areas: IT and what we affectionately termed the "thousand tiny items". This latter category included literally everything non-oil related. And when I say everything, I mean it - from toilet paper to condoms.
Condoms?! Why on earth would MOL need to purchase condoms?
It's not what you might think! This was actually for the lubricating oil sensory tests in our Százhalombatta laboratory. The technicians couldn't perform these tests with bare hands, but standard rubber gloves were too thick to allow for proper sensory evaluation. Our solution? Condoms. They're much thinner, you see, allowing for a much more accurate tactile assessment of the oil properties.
We can only imagine the reaction when you called to place an order: "Hello, I'm calling to purchase 1300 condoms on behalf of MOL."
That certainly would have made for an amusing conversation! Luckily, our actual order was much more modest in quantity.
So essentially, your procurement team was responsible for ordering everything not directly tied to production.
Exactly. Given the scale of operations at that time, this translated to about 30 billion forints in spending. And to put that into perspective, I'd say we had direct oversight on maybe half of that. The rest was still beyond our sphere of influence at that point.
Did the money just vanish into thin air?
Not exactly. In my previous roles, I could maintain comprehensive oversight of all activities. But MOL was on a whole different scale - its sheer size made complete transparency practically impossible. This was a significant learning curve for me.
However, certain developments began to nudge me towards considering my next move. We got a new boss whose expectations differed dramatically from his predecessor's. At that point, it became increasingly clear to me that my chapter at MOL would likely come to a close in the near future.
What other options did you have at that point?
My choices were quite limited, to be honest. At that time, there was only one other position in Hungary comparable to mine – at MATÁV, our national telecommunications company back then. That role was already occupied by a close friend of mine. We did consider the possibility of relocating abroad, but neither my family nor I were particularly enthusiastic about that idea.
This period coincided with significant advancements in electronic and IT tools, which we were progressively implementing at MOL. As we worked with these new technologies, the seed of a potential future business venture began to germinate. Interestingly, when a colleague first floated this idea to me, I dismissed it outright. I remember thinking, "Why would I leave a stable, satisfying job to become an entrepreneur?" However, as the circumstances I mentioned earlier began to shift, so did my perspective on this possibility.
My future business partner was working at a Matáv subsidiary – a joint venture by several major companies that was essentially a startup before the term became widespread. While the company itself didn't succeed, they had developed one promising product: an electronic auction platform. This technology was just beginning to make waves in the procurement world, which sparked our idea to venture into this field. We were severely undercapitalized, to put it mildly, but we were determined. We rolled up our sleeves, drafted a business plan, and in 2003, we took the plunge and launched Fluenta's predecessor, Electool.
Stay tuned for the next installment of our interview series. Don't miss the first part either.