The European Commission is investigating €52.7m aid for a project of Dell Products Poland for the establishment of a new manufacturing plant in Łódź, Poland.
The investigation under EC Treaty state aid rules will look closely at the market for the products to be made at the plant, the extent of the increase in production capacity resulting from the investment and the extent to which demand for these products is in decline.
“We need to investigate all the effects of this aid to verify that it contributes to regional development and to ensure that it will not reinforce Dell’s position or create significant capacity in a market on the decline in the EEA,” said competition commissioner Neelie Kroes.
Dell Products Poland, which is wholly owned by the US PC company, intends to set up a new plant for the production of desktops, notebooks and servers which is expected to create up to 3 000 jobs in the Łódzkie region.
It is eligible for regional aid as this is an area with an abnormally low standard of living and high unemployment. The costs to be taken into account for the calculation of the aid amount to €189.58m and the proposed aid amount is €52.73m.
According to the Commission, it has verified whether Dell’s market share and the capacity created by the investment remain below the thresholds for large investment projects set out in the regional aid guidelines.
“In this context, doubts have arisen with respect to the market delineation for the products concerned, the capacity increase generated by the project and the decline shown by some of the products concerned,” said the EC.
The Commission said it will now verify whether the thresholds of the regional aid guidelines are respected, whether the aid provides an incentive for investment and whether the benefits of the measure outweigh the resulting distortion of competition.
“The opening of an in-depth investigation gives interested parties the possibility to comment on the proposed measure. It does not prejudge the outcome of the procedure,” said the EC.