A medical-device contract manufacturer in a structurally weak region runs at full capacity and is turning away orders. To grow, it needs additional cleanroom production space and new assembly and packaging lines that meet medical standards. The expansion is a classic capacity investment: more of what the company already does, at a larger scale and with new equipment.
The Joint Task for Improving Regional Economic Structure (GRW) gives a non-repayable investment grant to companies that invest in a designated structurally weak region and create or secure permanent jobs. As well as new establishments, it explicitly supports capacity expansions of an existing site. The eligible costs are the acquisition and construction costs of the additional fixed assets, here, the cleanroom build-out and the new production equipment.
Rates depend on the assisted area and company size, in a range of roughly 10 to 35 percent, with smaller companies receiving more. The conditions are the same as for a new plant: apply before the investment starts and before any binding contract, complete the investment within 36 months, and keep the funded assets in the establishment for at least five years. The grant is administered by the responsible state development bank.
The expansion qualifies as a capacity expansion in an assisted area. The eligible costs are the construction of the additional cleanroom and the new production equipment, and the condition is again the creation or securing of permanent jobs, the expansion both secures the existing workforce and adds new skilled positions in a region that needs them. As a medium-sized company, the manufacturer receives a lower rate than a small company, in this assisted area in the order of about 20 percent. On an eligible investment of around EUR 6 million, the non-repayable grant comes to roughly EUR 1.2 million. The application is filed before any binding order, and the assets are committed to stay for five years.
A €1.2M GRW grant.
The grant reduces the capital the company has to raise and improves the return on the expansion. The company finances the remainder itself and through its bank, secures its existing jobs and adds new skilled ones, and removes the capacity ceiling that was costing it orders.
Investment grant · ~20% of eligible costsA profitable, growing company in a structurally weak region should check GRW before committing a large capacity investment. Even at the lower medium-company rate, a fifth of a multi-million investment is a significant, non-repayable contribution, and the discipline of applying before any binding order is the same as for a new build.
The questions we hear most about the programme. Short answer first, detail after.
It funds capacity expansions of an existing establishment in an assisted area, not only new establishments, provided the expansion creates or secures permanent jobs.
A lower rate than a small one, depending on the assisted area, in the order of about 20 percent of eligible investment costs.
No. GRW funds the physical investment, the build-out and the production equipment, not regulatory or certification work.
Before any binding order for the build-out or the equipment. The investment must be completed within 36 months and the assets kept for at least five years.
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