Brussels – The European Commission has approved a EUR 45m grant from Hungary to Borsodchem to help build a new aniline plant in Kazincbarcika.
The total cost of the project is EUR 142m, according to the EC. Aniline is a key raw material in MDI production.
'Without the public funding, the project would not have been carried out in Hungary or another EU Member State. It would have been cheaper to continue importing aniline from the group's plants in China,' the EC said.
The Commission also found that the aid is just enough to make the project viable.
It added that the project will contribute to job creation and the economic development of a disadvantaged region.
Moreover, it will also reduce environment risks which arise long-distance transportation of aniline.
BorsodChem has a limited market position in Eur0pe and the MDI market is growing strongly, said the Commission. These factors led the EC to believe that the aid would not distort European- or world-markets for MDI.
Finally, the Commission concluded that positive effects on regional development and the EU's environmental objectives outweigh any potential distortion of competition.
Borsodchem is a subsidiary company of China's Wanhua.