2004/314/EC: Commission Decision of 17 September 2003 on the State aid which Italy is planning to implement for Aquafil Technopolymers SpA (Text with EEA relevance) (notified under document number C(2003) 3240)
Date: 2003-09-17
Institutions: European Commission
Subjects: Italy, State aid, control of State aid, man-made fibre

L 100/40

EN

Official Journal of the European Union

6.4.2004

COMMISSION DECISION

of 17 September 2003

on the State aid which Italy is planning to implement for Aquafil Technopolymers SpA

(notified under document number C(2003) 3240)

(Only the Italian text is authentic)

(Text with EEA relevance)

(2004/314/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-
munity, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1) and having regard to
their comments,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

I. PROCEDURE

By letter dated 28 February 2002, the Italian authorities
notified a plan to grant investment aid to Aquafil Tech-
nopolymers SpA, a producer of polymers, a chemical
product used for the production of synthetic fibres.

By letter dated 5 June 2002, the Commission informed
Italy that it had decided to initiate the procedure laid
down in Article 88(2) of the EC Treaty in respect of the
aid.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Commu-
nities (2). The Commission invited interested parties to
submit their comments on the aid.

The Commission received comments from interested
parties. It forwarded them to Italy, which was given the
opportunity to react.

II. DETAILED DESCRIPTION OF THE AID

a wholly owned
Aquafil Technopolymers SpA is
subsidiary of Aquafil SpA, which is itself part of Gruppo
Bonazzi SpA,
the Bonazzi
the holding company of
family. The group, which is a major producer of
synthetic fibres, has recently carried out a vertical inte-
gration of its production chain, setting up new compa-
nies for the production of the different chemical raw
materials it needs for its internal use.

is part of this strategy. Aquafil
The new investment
Technopolymers SpA, which was
founded recently,
groups together the chemical compounding activities
and the production of base polymers for compounding.

(1) OJ C 170, 16.7.2002, p. 7.
(2) See footnote 1.

(7)

(8)

(9)

is

The new plant
to produce two main types of
compounds: ‘masterbatch’, initially only for the group's
self-consumption, and compounds of polyamide 6,66
and 12, mainly for sale outside the group, with 60 % to
be placed on the Italian market and the remainder in the
rest of Europe. The investment costs relate to the acqui-
sition of an existing industrial building (EUR 6.2
million) and the installation therein of the necessary
equipment (EUR 1,3 million).

Aquafil's main competitors
are
Nyltech, Radici Novacips, Lati, Basf, Bayer, Dupont
General Electronics, Ems, Huels.

at European level

The notified aid consists of a grant equal to 10 % of the
investments costing EUR 7 457 000,30 to be under-
taken by Aquafil Technopolymers SpA. The grant is to
be awarded by the Autonomous Province of Trento
under Provincial Law No 6 of 13 December 1999, here-
inafter referred to as ‘Law No 6/1999’, governing all aid
granted by the Province to businesses.

The Italian authorities base their notification on two
provisions of Law No 6/1999. Article 2(3) provides that
the Law for
large firms are eligible for aid under
purposes other than horizontal objectives, subject
to
prior notification and approval of individual grants by
the Commission. This would be the case where the aid is
in
necessary for the firm to remain on the market,
competitive terms, or to safeguard jobs. Article 9(4) of
the Law states that in the case of a replacement activity,
aid for investment can be increased by 10 % in relation
to the aid intensity laid down in the Community rules.
Replacement activity is defined therein as the creation or
expansion of a company that reabsorbs a significant
proportion of previously lost jobs.

(10)

that

The Italian authorities consider
the investment
planned by Aquafil Technopolymers SpA is necessary to
safeguard jobs and qualifies as a replacement activity,
because the building acquired with this investment and
where the new plant
is to be installed belongs to
Komarek SpA, a company in liquidation, from which
Aquafil Technopolymers SpA will also be taking some
employees. Out of the extra 20 new jobs to be created
at this new plant, the company has undertaken to fill at
least nine with former employees of Komarek SpA.

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(11)

(12)

III. GROUNDS FOR INITIATING THE PROCEDURE

In its decision initiating proceedings, the Commission
the exceptions provided for in
doubted that any of
It
Article 87 could be applicable to the notified aid.
could not be regarded as aid for a company to remain
on the market or to safeguard jobs, or, in other words,
as rescue and restructuring aid. The Commission noted
that
the investment was not part of a restructuring
process but, on the contrary, it was an investment for
expansion/consolidation in the market of the company
and of the group it belonged to. The Italian authorities
had not provided any restructuring plan, nor did they
claim that the investment formed part of a restructuring
plan for the company. Moreover, Aquafil Technopoly-
mers SpA was established at Arco in the Province of
Trento, and Trento was not eligible for regional invest-
ment aid.

IV. COMMENTS FROM INTERESTED PARTIES

trusting that

the investment

The only interested party that submitted comments is
the beneficiary of the planned aid. Aquafil claimed that
it carried out
it would
receive the aid provided for in Law No 6/1999. It also
maintained that it was not rescue or restructuring aid
but aid for a replacement activity as provided for in Law
No 6/1999. It claimed that the size of the workforce had
been maintained, since it had taken over some of
Komarek's workers and had hired new ones, so that the
level had remained basically the same.
employment
Finally, it maintained that the investment had a favour-
able impact on the environment (reduction of waste,
since the plant used as raw material waste produced in
another plant; reduction of transport, since the plant
was located close to another plant which was to use the
final product; refurbishment of the roof of the building
in order to prevent asbestos dust escaping into the air).

V. COMMENTS FROM ITALY

(13)

The Italian authorities maintained that the aid could not
be classed as rescue or restructuring aid. It involved an
increase of 10 % in the allowable aid intensity for invest-
ments concerning a replacement activity making it
possible to take over some of the workers of a company
that had ceased trading within the meaning of Article 9
of the Regional Law, which had been approved by the
Commission. Italy requested the Commission not to call
into question the provisions of Law No 6/1999 when it
examined individual projects notified to it and to eval-
uate the planned aid to Aquafil, where appropriate
making its approval subject to conditions.

(15)

(16)

(17)

threatens to distort competition by favouring certain
undertakings or the production of certain goods shall,
insofar as it affects trade between Member States, be
incompatible with the common market.

The proposed aid to Aquafil Technopolymers SpA
consists of an outright grant to be financed by State
resources from the Autonomous Province of Trento. The
production of Aquafil Technopolymers SpA in particular
and of Aquafil
is widely traded throughout
Europe. The proposed grant to Aquafil Technopolymers
SpA therefore constitutes State aid within the meaning
of Article 87(1) of the Treaty.

in general

The notification was made under Article 2(3) of the
Regional Law, which provides that, except for de minimis
aid, aid for environmental protection and R & D aid,
large undertakings qualify for the aid measures provided
for in the Law only where the aid is necessary for them
to remain on the market, in competitive terms, or to
safeguard jobs, subject to prior notification and approval
of the individual grants by the Commission.

The notified aid to Aquafil Technopolymers SpA cannot
be regarded as aid to enable a company to remain on
the market or safeguard employment or, in other words,
as rescue and restructuring aid. The company is not in
difficulty and the investment is not part of a restruc-
turing process; on the contrary, it is an investment for
expansion/consolidation in the market of the company
and of the group it belongs to, Gruppo Bonazzi SpA.
This group, one of the largest in Italy in the synthetic
fibres sector, has been implementing in recent years an
industrial strategy of vertical
integration. The Italian
authorities have not provided any restructuring plan, nor
have they (or the beneficiary) claimed that the invest-
the
forms part of a restructuring plan for
ment
company.

(18) Neither can the aid be regarded as aid to safeguard jobs.
In accordance with Article 9(5) of Commission Regu-
lation (EC) No 2204/2002 of 12 December 2002 on the
application of Articles 87 and 88 of the EC Treaty to
State aid for employment (hereinafter the employment
aid regulation) (3), aid to maintain jobs consists of finan-
cial support given to an undertaking to retain workers
who would otherwise be laid off. In the present case,
however,
the aid is for
investment for the company's expansion/consolidation
in the market which has entailed the creation of jobs.

the Commission notes that

VI. ASSESSMENT OF THE AID

(14)

In accordance with Article 87(1) of the EC Treaty, any
through state
aid granted by a Member State or
resources in any form whatsoever which distorts or

(19)

The Commission therefore considers that the aid is not
covered by the approved scheme and that, accordingly,
the provisions of Article 9(4) of Law No 6/1999 are not
applicable.

(3) OJ L 337, 13.12.2002, p. 3.

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(20)

(21)

(22)

(23)

In these circumstances, the Commission must examine
whether the aid can be considered to be compatible with
the common market under the provisions of Article
87(3)(a) or (c) of the Treaty.

The Commission has decided, on proposals from the
Member States, which areas in each of the Member
States qualify for the geographical exceptions under the
abovementioned provisions; such areas are indicated on
the ‘regional aid maps’. Aquafil Technopolymers SpA is
located in Arco, Trento. According to the regional aid
map for Italy (4), Trento is not eligible for regional
investment aid. The Commission therefore considers that
the proposed aid cannot qualify for the regional excep-
tion to the general ban laid down in Article 87(1).

The Commission has also set out in different communi-
cations, guidelines and regulations, the rules it applies
when assessing and approving State aid with horizontal
objectives which qualifies for an exception pursuant to
the first sentence of Article 87(3)(c). Such aid is for
environmental protection,
research and development,
employment and vocational training.

The Commission notes that, under Article 4(2) of the
employment aid regulation, large firms located outside
areas or sectors eligible for regional aid do not qualify
for aid to create employment. Moreover, in accordance
with Article 9(5) of the regulation, firms located outside
areas eligible for the derogation under Article 87(3)(a)
are not eligible for aid to maintain jobs. The Commis-
sion also notes that
the Italian authorities have not
considered the investment eligible for aid for environ-
mental protection and therefore have not provided any
information allowing the Commission to examine it
under the Community guidelines on State aid for envir-
onmental protection (5).

(24)

In these circumstances the Commission considers that
the notified aid is not eligible for the exception provided
for in the first sentence of Article 87(3)(c).

VII. CONCLUSION

(25)

In view of the foregoing, the Commission finds that the
State aid that Italy intends to implement in favour of
Aquafil is incompatible with the common market,

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Italy is planning to implement for Aquafil
Technopolymers SpA, amounting to EUR 745 700, is incom-
patible with the common market.

The aid may accordingly not be implemented.

Article 2

Italy shall inform the Commission, within two months of noti-
fication of this Decision, of the measures taken to comply with
it.

This Decision is addressed to the Italian Republic.

Article 3

Done at Brussels, 17 September 2003.

For the Commission

Mario MONTI

Member of the Commission

(4) Approved by the Commission on 1 March 2000 (OJ C 175,

24.6.2000) and 20 June 2001 (letter SG 2001 D/289334).

(5) OJ C 37, 3.2.2001, p. 3.