EU says Allied must return aid

05 September 1994 00:00  [Source: ICB]

ALLIEDSIGNAL HAS to give back part of the FF200m ($35.2m) aid awarded by the French government in support of its new polyester fibre plant at Longlaville, France (ECN 5 April 1993) The EU has said about FF26.3m of the package could not be paid because it broke the Union's regulations on aid to the synthetic fibres industry.

The Commission, which has the power to clear or block state aid in the EU if it believes competition is impaired, has requested that FF621 000 already paid must be returned with interest.

AlliedSignal Fibres said it regrets the decision and may appeal. A company spokesman said, We believe we have taken all reasonable steps to verify that the subsidies offered by the authorities were compatible with the Commission.

The plant, which came onstream last year (ECN 27 September 1993) has a total capacity of 19 000 tonne/year. Output from the facility replaces some 8000 tonne/year of imports from the US, essentially all from AlliedSignal.

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