bne IntelliNews -
The European Commission has approved Slovakia’s largest award of investment incentives for 12 years: a 10-year tax break worth €58mn for Duslo, a chemicals manufacturer owned by Czech Finance Minister Andrej Babis' conglomerate Agrofert.
The decision, announced on January 6, may help quell criticism regarding the level of incentives demanded by the Czech company, suggested Slovak media.
The incentives will support Duslo’s €310mn planned investment in ammonia production in Sala, in south- western Slovakia. Agrofert plans to build a new plant, which is expected to be completed in 2017.
Agrofert has been talking about the investment for some years. It has pushed Bratislava on incentives by complaining of high energy prices and threatening to switch the investment to the Czech Republic or Germany. The company reportedly signed off on the deal with the government in November, but has been waiting for the green light from Brussels.
The European Commission explained that Duslo’s investment is expected to preserve around 1,800 jobs directly, as well as hundreds of others at suppliers, in an area with high unemployment and a standard of living below the EU average. The Commission concluded that the positive effects of the investment on employment and economic development outweighed any potential negative effects on competition.
Agrofert is owned by Andrej Babis, the Czech Republic’s second richest man and increasingly powerful finance minister. Babis is Slovak born, and recently won a court ruling dismissing claims that he worked with the Czechoslovak secret police during Communist times. He started out on building his estimated €2.4bn fortune in the 1980s at state-owned Petrimex, then the monopoly importer of oil and chemical products to Slovakia.
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