A new government aid package to STMicroelectronics should secure the company's continued presence in Malta, Finance Minister Tonio Fenech said yesterday.

ST, the world's fifth largest semiconductor company, has used the investment aid to build a new high-end production line at its Kirkop plant. The sizes of the aid package and the investment were not disclosed.

The multinational company had downsized its Malta workforce by around 400 employees last year after facing worldwide difficulties and there were fears for the company's future. At that time, Mr Fenech had voiced the need to work with ST "to make sure it continues its Malta operation".

ST currently employs around 1,500 people, making it the largest private sector employer. It is also by far Malta's leading exporter.

Mr Fenech said the government had assisted the Malta plant of ST to weather the storm and maintain its competitiveness and this was now paying dividends for the country.

Talking to The Times, he said the investment aid was in line with EU regulations and was conditional on the company's commitment to invest in new technology.

"As a result, the Malta plant will become more competitive, reversing the negative trend it experienced over the past two years."

He said the aid package was necessary to ensure ST's continued presence here, which would ultimately benefit employees and the economy.

Prime Minister Lawrence Gonzi and Mr Fenech were yesterday taken on a guided tour of the manufacturing plant on which only cameramen and photographers were allowed.

When asked afterwards whether talks between the government and the company centred on any request for subsidy that the microchip giant may have made, Dr Gonzi said discussions focussed on "how best to invest in human resources".

The company made no official announcement on the investment but in a statement issued later by the Office of the Prime Minister, the government confirmed it had concluded discussions to "enable further investment in new high-end technology production".

The assistance will include worker training, enabling the plant to produce the latest micro-chips for use worldwide in mobile phones and computer games. ST is a world leader in making miniaturised components for gyroscopes, compasses and microphones used in the latest smartphones, computer games, auto-electronics, medical equipment, digital cameras and other technology-based products.

Dr Gonzi said the investment was the result of the government's actions to counter the impact of the international economic downturn by supporting companies and safeguarding jobs, enabling those companies to be in a position to invest further and strengthen their position.

"Despite the worldwide economic situation, ST is continuing to show confidence in Malta as a prime investment location," Dr Gonzi said.

The lengthy talks were with ST's highest officials including president and CEO Carlo Bozotti.

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