European Commission Directorate General for Comp : State aid: Commission approves €58 million aid to Duslo a.s. for modernising ammonia production in Šal'a, Slovakia

The European Commission has found that Slovak plans to provide €58 million regional investment aid to Duslo a.s. is in line with EU state aid rules. Duslo, which forms part of the Czech conglomerate Agrofert, is located in Šal'a, Slovakia, and produces nitrogen (including ammonia), compound industrial fertilisers and other chemical products, such as rubber chemicals. The Commission concluded that the aid would further regional development objectives without unduly distorting competition in the Single Market.

In July 2014, Slovakia notified plans to grant tax incentives worth €58 million to support an investment project aimed at modernising Duslo's production facilities for ammonia in Šal'a, an area with high unemployment and a standard of living below the EU average, eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the European Union (TFEU).

The Commission assessed the project under its Regional Aid Guidelines 2007-2013 (application extended until 30 June 2014) that are applicable to measures in relation to which the decision to grant the aid was taken before 1 July 2014. The guidelines allow the granting of state aid for regional investment projects that will further the development of the area concerned, under certain conditions. In particular, the Commission has to assess whether the positive effects of the measure on regional development outweigh the distortions of competition that may be created by the aid.

Duslo will invest a total of €310 million. The project is expected to preserve around 1,800 jobs at the plant and hundreds of other jobs at companies supplying for the plant's production in one of the least developed regions of the EU. Moreover, Duslo's shares in most relevant markets, even taking into account the sales of its parent company, are modest. The Commission therefore concluded that the positive effects of the measure on employment and economic development clearly outweigh any potential negative effects on competition.

Background

Duslo a.s., owned by the Czech conglomerate Agrofert, is a company located in Šal'a, Slovakia, that produces nitrogen and compound industrial fertilisers and other chemical products, such as rubber chemicals.

Regional aid is aimed at reducing disparities between richer and poorer areas in the EU by encouraging companies to invest in underdeveloped regions. The regional aid guidelines set out the criteria under which Member States can support such investments. When the Commission's assessment finds that the criteria are fulfilled, the Commission approves the project and the measures can be implemented. For aid granted after 1 July 2014, the new Regional Aid Guidelines 2014-2020 apply.

More information will be available on the Commission's competition website, in the public case register, under the case number SA.39009 once any confidentiality issues have been solved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.