MOL acknowledges EC approval of investment aid

Automotive

Hungarian oil and gas company MOL on Thursday acknowledged the European Commissionʼs authorization of EUR 131 million of investment aid the Hungarian government aims to grant to the company for construction of a new polyol production plant in Tiszaújváros, northeast Hungary.   

The European Commission on Wednesday cleared the provision of the state aid for expansion of MOLʼs petrochemicals plant in the underdeveloped northeast of the country.

MOL said Thursday the investment aid will take the form of a corporate tax allowance - to be utilized following the commissioning of the new plant - and to a smaller extent a direct cash grant of EUR 37.7 mln.

The cash grant will be provided by the Hungarian Investment Promotion Agency (HIPA), based on a decision of the Ministry of Foreign Affairs and Trade.

The investment will create almost 200 long-term jobs directly and thousands of additional jobs indirectly during the implementation and construction phase, MOL Chairman-CEO Zsolt Hernádi said at a press conference on Thursday, held together with Minister of Foreign Affairs and Trade Péter Szijjártó. 

The new petrochemical plantʼs output will add HUF 70 billion a year to Hungaryʼs GDP, Hernádi added.

MOL plans to invest USD 4.5 bln by 2030 in its petrochemical business, the companyʼs chief added.

The EC earlier said it found that the state aid merely compensated for the costs incurred by carrying out the job-creating project in Tiszaújváros rather than an alternative location, and concluded that "the positive effects of the project on regional development clearly outweigh any distortion of competition."

The state aid supports a total investment of EUR 874 mln to add polyols, an essential component of polyurethane which goes into furniture, building materials and car parts, to the production palette at MOL Petrolkémiaʼs plant in Tiszaújváros.

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