European Commission authorises €57.9 million aid to Hankook Hungary’s new plant

The European Commission authorised €57.9 million of regional investment aid to Hankook Tire’s Hungarian entity Hankook Tire Hungary Manufacturing and Trading Ltd (Hankook Hungary) for the construction of a tyre plant. The plant will be built in Rácalmás, Fejér county, Hungary as the commission , after its investigation, found the step favourable to regional development while limiting the distortions of competition brought about by the state aid.
“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 last year, Hungary expressed its plans to support to the construction of a new plant next to the Hungarian tyre entity’s existing plant with a direct grant of €24.1 million and tax allowances of around €33.82 million. The project involves investments of €305.5 million.
The Commission’s investigation found that the market shares of Hankook Tire (Hankook Hungary’s parent company) in the European Economic Area (EEA) market and world market for passenger car tyres and light truck tyres will stay below 25% after the investment. Moreover, the production capacity created by the investment remains below 5% of the market.

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