European Commission endorses investment aid for Hankook Hungary

ERJ staff report (TP)

Brussels, Belgium – The European Commission (EC) has authorised €57.9m of regional investment aid to the Hungarian company Hankook Tire Hungary Manufacturing and Trading Ltd ("Hankook Hungary") for the construction of a tire plant in Rácalmás, Fejér county, Hungary.

The EC found that the measure favours regional development while limiting the distortions of competition brought about by the state aid. It is in line with its guidelines on regional aid, in particular with the rules on large investment projects.

“Hankook Hungary's investment project is expected to create 950 new jobs in Rácalmás. It will provide a welcome boost to the development of the region without unduly distorting competition in the ‘Single Market’," said Commission Vice President in charge of competition policy Joaquín Almunia.

In December 2013, Hungary notified plans to support the construction of a new tire plant next to Hankook Hungary's existing plant in Fejér County with a direct grant of €24.1m and tax allowances of around €33.82m. The project involves investments of €305.5m.

Rácalmás, in the Central Transdanubia region, is an area with high unemployment eligible for regional aid under Article 107(3)(a) of the Treaty on the functioning of the European Union (TFEU).

Hankook Hungary belongs to Hankook Tire Co. Ltd, a Korean publicly held company. Hankook Hungary is extending its facilities in Rácalmás by building an additional tire plant next to its existing plant. The new tires to be produced are ultra-high performance, sealant and runflat.

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Press release from EC