The European Commission Thursday said it has approved regional investment aid aggregating about EUR 117million to Nexen Tyre Corporation Czech s.r.o. for the construction of a tyre production plant in Zatec, Czech Republic.
The Commission found that the aid granted by the Czech Republic was compatible with EU state aid rules, and promotes regional development without unduly distorting competition in the internal market.
EU Commissioner Competition Policy Margrethe Vestager said, “This tyre production plant will create at least 1000 new jobs in Zatec and contribute significantly to the economic development of the region. I am pleased we today approved state aid to make this happen – It is a good use of public money in line with EU state aid rules.”
The total investment in the project amounts to EUR 769 million and is expected to create at least 1000 new jobs in Zatec, in the Severozapad region. The area has been identified as high unemployment region with a standard of living that is below the EU average, and therefore eligible for regional aid under EU state aid rules.
The Commission assessed the project under the Regional Aid Guidelines 2007-2013, and in particular its rules on large investment projects.
Even after the investment, Nexen’s market shares (including sales by its parent company) in the relevant tyre markets and the production capacity created remain below certain thresholds. The Commission therefore concluded that the measures’ positive contribution to regional development would outweigh any distortion of competition created by the state aid. – RTT News