EU regulators approve Hamburger Rieger aid, to open investigation on Rehau aid

The European Commission gave green light to German investment aid to paper manufacturer Hamburger Rieger and opened investigation into German aid to polymer processer Rehau, it was announced Monday.

The commission, the executive body of the European Union (EU), has found the 33-million-euro investment aid to Hamburger Rieger, a German paper and plasterboard manufacturer, to be in line with EU state aid rules, it said in a statement.

In a separate decision, the commission opened an in-depth investigation to assess whether the 4-million-euro aid to Rehau AG+Co, a polymer business based in Switzerland active amongst other things as automotive supplier, complied with the bloc's regional aid guidelines.

Hamburger Rieger GmbH is a large German manufacturer of paper and plasterboard. It has plans to invest 363 million euros (409 million U.S. dollars) to extend its paper production capacity by setting up a new stock preparation process and building an additional paper machine in its existing production plant in Spremberg.

Germany plans to grant public funding of 33 million euros to support the project. The commission said it found that without the public funding, the project would not have been carried out in the Spremberg region.

The commission therefore concluded that the positive effects of the project on regional development clearly outweigh any distortion of competition brought about by the state aid.

Rehau AG+Co is a large processer of polymer, among others for car parts, headquartered in Switzerland. It has plans to invest 50 million euros in replacing its existing paint shop in Germany's Viechtach.

Germany plans to grant public financing of 4 million euros in support of the project. At this stage, the commission said it doubted whether the planned production process was sufficiently innovative to qualify as innovation for purposes of the regional aid guidelines. Endit