Johnson & Johnson project goes ahead

US pharmaceutical giant Johnson & Johnson is pressing ahead with its €530 million investment in Little Island, Cork, despite an EU threat to block €50m in IDA grants committed to the project.

Its subsidiary Centocor is to produce a range of medical products at the plant for the treatment of a variety of diseases. The company originally announced plans for the project in July 2004.

EU competition officials have demanded extensive details of the plant and grant said from the Department of Enterprise, Trade and Employment.

The process has set the venture back about 12 months but it is gong ahead, a spokeswoman for the department said last night.

It is understood that any plans for further expansion will not go ahead if the investment aid is blocked by the EU Commission. It has expressed serious concerns the hefty €50m grant aid is anti-competitive.

In the course of its investigation it has demanded extensive back up material from the department and IDA Ireland on the nature of the commercial development planned by the giant pharmaceutical group.

It has yet to make a final decision, but an announcement is due within a month, it is understood.

Precedent for the blocking of grant aid to multinationals setting up here already exists.

That was set in March when the EU blocked a €170m aid package to Intel, the world’s largest computer chip manufacturer.

The funding was towards its new state-of-the-art €2.5 billion plant in Leixlip. Intel has massive investment in Ireland and the move by the commission raised fears of further restrictions down the line.

Another ruling against the IDA grant aid system could seriously damage this country’s ability to entice foreign direct investment into Ireland.

With competition intense across Europe and elsewhere for new investment the IDA is struggling to win new start-ups and the past few years has seen a fall in investment trends.

As a result of the uncertainty over the grant package the project has been delayed and will be 12 months behind schedule, but that was due to the commission’s demands.

It does not reflect any reluctance by the company to proceed, the department spokeswoman said.

She refused to comment however that this latest attempt by the commission to block funding of another inward investment project has been taken up at the highest level within Government.

At this point the department was dealing with Brussels on the matter and “we have not further comment to make at this time”, she said.