From Holon to Budapest, via Beverly Hills

A Californian-Israeli businessman has acquired a half share in Rubik Studio in Budapest and is planning a worldwide comeback for the far-famed Rubik's Cube puzzle, whose sales are minimal these days.

The $ 3-million investment in Rubik was put together by Uzrad Lev, 31, originally from Holon, who two years ago founded Gal Industries, an international investment company with headquarters in Beverly Hills. Funding came from a European investment-banking firm, as well as Lev and private backers.

The cube puzzle, designed by Erno Rubik, has perplexed millions since taking the world by storm in the mid-1970s. Over a billion dollars in revenue were generated from the sale of the cubes and more than 100 million units of other Rubik games, such as Rubik's Magic Puzzle, Rubik's Magic Dice and Rubik's Triamid, all of which were produced by Matchbox, Inc., one of the world's largest toy companies. In the last four years, however, Rubik's Studio witnessed a sharp decline in sales.

Lev has devoted the months since concluding the deal with Rubik to the development of three subsidiaries, in the United States, Germany and in an as-yet unchosen site, but slated to be in a developing country, perhaps Israel. "This depends on the marketing surveys now under way," he says. With 12 games in the lineup, Lev feels the market is hardly exhausted.

Rubik Studio's staff of 30 designs, develops and manufactures toys and other design-oriented products: furniture, promotional products, control rooms and offices. Lev thinks it has the potential to become the next world powerhouse in toy design, to compete with such current titans as Mattel, Matchbox and Western Publishing.

Lev's interest in Hungarian acquisitions began in 1990, when he was completing an MBA at Pepperdine University, in Malibu, California. There he encountered visiting professor Zoltan Krascnai, then the leader of an economic team that assisted Hungary's current non-communist regime in devising an economic agenda and now deputy editor of Hungary's second-largest newspaper, Magyar Nemzet.

"Instead of trying to find opportunities in the U.S.," recounts Lev, "we felt we could identify some in Eastern Europe, which was just opening up. A small aggressive company like Gal Industries, with solid contacts, could establish itself in Hungary fast enough to be in a competitive position in the next wave of investment, when the big firms come."

Gal debuted in Hungary in June 1990 by acquiring a personal-computer assembly plant for just over half a million dollars. Eurocomp, which assembles off-the-shelf components into IBM PC clones, now churns out some 300 to 400 units a month, with assembly costs of $ 3 per unit, many times lower than the cost in Taiwan, for example. Within two years, Lev expects the company to reach a capacity of some 20,000 computers a year. Some of these will be sold in Israel, bundled with a multilingual software package called Multiwriter, created in Israel and translated into Hungarian.

Lev also acquired a Hungarian agricultural software firm, whose systems manage such disparate endeavors as milking, fish farming and irrigation. He has also signed a letter of intent to buy ANAT Computers, an agricultural software development firm at Kibbutz Bror-Hayyil, in the Western Negev.