One of the biggest challenges in the lifecycle of a business is the transition from a one-person company to a structure of business units. One-person organisations are flexible and responsive to change. Still, they need to adapt their structure and responsibilities as they grow.
Pannon Group has also followed this path.
As we wrote in our previous blog article about the early days, the first company of Pannon Group, Pannon Invest Bt. was primarily engaged in real estate brokerage and development at the time of the regime change in Hungary. Its portfolio was later expanded through liquidation and reorganisation of companies.
Organic business development has meant for the Group to expand services and develop human resources simultaneously.
The heyday of the business sector portfolio at Pannon Group
“In the early days, my father did much of the work himself. Later, an auditor with an international licence joined the company as an accounting specialist. This careful building process continued until the financial crisis of 2008-9, and resulted in an organisation with 12 offices and 100 staff, respected across the country,” – said Katalin Varga. She recalled that the organisational operations resembled an amoeba at the time, continuously changing shape and size as required by the ever-changing environment.
“We can solve it, no matter the problem or the task. That’s what we’ve always said to our customers, and that’s why we’ve developed this way of working as an organisation, which I think now is a bit embedded in our corporate culture.”
Katalin Varga recalls that her father established a corporate culture at the group that did not rely on one-person decision-making.
“He always surrounded himself with colleagues he could trust, so he never needed to micromanage”.
Revising, Katalin Varga decided to join the family business, replacing her academic career with business consulting in the aftermath of the financial crisis of 2008-9.
“We suffered significant losses during this period but did not lose everything! We kept our most valued possession, our positive reputation!”
– emphasised Katalin Varga.
“We perceived the situation as a challenge rather than a loss. Due to our robust foundations, we could exploit the opportunities arising from the crisis. After a valuable restructuring, we embarked upon a growth path and seized a new opportunity by entering the hospitality market.”
And the tourism sector has changed the previous operational model to a small extent. The industry requires a more tightly-knit organisational structure, precise allocation of tasks and responsibilities, and more control. However, in line with our corporate culture, our colleagues in this branch also have a significant degree of autonomy, independence and responsibility. According to Katalin Varga, it is rare for a tourism business of this size to be managed from a head office in Pécs.
The oldest and most stable business:
property development and industrial parks
Jenő Varga, the founder, was interested in real estate from the very beginning. He constantly looks for business opportunities and has bought properties over the past decades. Since then, he has built up a substantial portfolio of properties.
The vast majority of these are industrial properties, which are both brokered and operated by Pannon Group. As a result of experience, the group is now also taking on property management for foreign-owned properties.
“Here we should not primarily think of physical construction, as there are a lot of administrative and legal issues and paperwork involved in real estate management, while the development aspects of real estate must not be overlooked” – explained Katalin Varga. She said that the group’s experience in real estate management has also proved helpful in the case of campsites.
The operation and leasing of industrial parks have long been an integral part of Pannon Group’s portfolio, and given geopolitical and economic policy trends, they are expected to become increasingly substantial.
Currently, industrial properties and industrial parks belonging to the Pannon Group are available at five separate locations:
- Hall and warehouse, Álmos út (Pécs),
- Industrial area, Edison utca (Pécs),
- Commercial, unbuilt area, Siklósi út (Pécs),
- Industrial property, Vasas (Pécs),
- and the company’s flagship, Pannova Industrial Park in Kővágószőlős.
The services of Pannova Industrial Park are also significant, as the group offers comprehensive administrational and business support for companies establishing themselves in the park, covering everything from A to Z, including:
- company start-up,
- accounting,
- tendering,
- technical preparation,
- marketing activities,
- legal, financial and business consulting,
- comprehensive insurance, and
- the park has its own utilities and electricity,
- but there is also parking and reception service available,
- or even meeting room rental.
“It is also worth noting that the location of Pannova Industrial Park is advantageous in many respects, as it is close to the soon-to-be-completed M60 motorway and has its own industrial railway track, providing an ideal infrastructure” – emphasised Katalin Varga.
Tourism business sector:
conscious building and learning
After 2008-9, Pannon Group has embarked on a new course. While the previous business consultancy assignments remained, the company started to build up its tourism business unit.
Today, the company runs three campsites and a hotel in Zamárdi, Siófok and Zalakaros. The company operates Aranypart Camping & Apartments in Siófok, Thermal Camping in Zalakaros, Mirabella Camping and Platán Hotel in Zamárdi.
In addition, through the Laguna Yacht Club in Balatonfűzfő, the company is also involved in marina management and accommodation sales.
According to Katalin Varga, his father, the founder, has been monitoring economic and industry changes for decades and has a vast network of contacts. The core competencies accumulated in the group ensured that tourism investments were successful despite the need to acquire new professional skills.
“This has always been a basic principle for us. We are able and open to learn when necessary.”
– explained Katalin Varga. Her journey to acquire an executive diploma at the University of Oxford clearly manifests this.
In many ways, tourism relates to property management and development, and those have been integral to the group’s tradition, which has developed its campsites significantly over the years. “…I think it’s essential to rethink camping as a high-quality, experience-based way of spending your holiday. I argue that a modern campsite can offer more than a hotel. More and more people agree with this statement, as camping is becoming a lifestyle for many. Nowadays, campsites providing quality services and the comfort of a hotel are becoming increasingly available. At these campsites, you can experience a higher sense of freedom than if you were to spend your holiday in a hotel room.
We strive to ensure that as many families and friends as possible can enjoy the freedom of being close to nature, the experience of barbecuing together, swimming, chatting with the neighbours of your camper and camping.” – wrote Katalin Varga, who was elected as a member of the board of the Hungarian Camping Association in May, on her LinkedIn page.
And the global economic trends of recent years confirm these intentions, as research shows that the number of foreign tourists arriving in Hungary, as well as the number of domestic tourists, is expected to increase. In addition, experts indicate that the role of campsites in the tourism sector is expected to grow.
“Often, our major business units interact, build on and learn from each other, which is what vertical service development is all about for us” – emphasised Katalin Varga. She added that this is particularly true in the areas of real estate and industrial park development, as well as tourism services. They also put their experience in crisis management and business development to good use when offering business consultancy, primarily for foreign-owned companies residing in Hungary.
Structure of the Pannon Group’s business units
From love to business:
the story of Pannova Horses
One of the defining elements of Katalin Varga’s life is her love of animals, especially horses. If you sit down to talk to her, the subject will turn to horses sooner or later.
As an endurance rider, trainer and international competition judge, she constantly lives among horses. “Whenever I have a little bit of free time, I go riding ” – said Katalin Varga.
Perhaps it is not surprising that the group bought its first stable in 2007. Cultivating almost 100 hectares of land, the company runs a stable of internationally outstanding quality 20 kilometres from Pécs, in Orfű.
The activities of Pannova Horses are mainly based on training, serving as competition judges, university education, as well as feeding, horse care and stable management consultancy.
Manó Farm, operating at the stable of Pannova Horses, provides therapeutic riding and individual sessions for children with developmental needs starting from a few months of age. Group sessions are also expected to be held here in the future.
Katalin Varga’s dedication to horses is demonstrated by her ability to apply her experience of observing horses’ behaviour and cooperation to business investments and management processes.
According to Katalin Varga, the thinking and behaviour of horses, if we observe and understand them well, can help us to understand horizontal organisational structures and personal motivations.
“It was this “world of leadership” represented by horses, based on partnership, acceptance, and trust, that captured me.”
In addition to these priority business sectors, Pannon Group has been active in the insurance market since the late 2000s with Pannon Alkusz Biztosításközvetítő Kft., which also supports the group’s broad expansion objectives. We wrote more about the group’s business consultancy business sector in a previous blog article.
As Katalin Varga said, they are currently monitoring the healthcare market, looking for opportunities to build a new business unit.