Why South of Ireland has such huge appeal for US investors
GE Healthcare Site Lead Eugene Barrett, Finance Minister Michael McGrath, Tanya O’Sullivan, QA Analyst and Kevin O’Neill, President & CEO GE Healthcare Pharmaceutical Diagnostics at the opening of the new €30.5m Manufacturing Line at GE Healthcare in Carrigtohill, Co Cork. Picture: Darragh Kane
, Irish Examiner Munster Business Editor, on the southern region's enduring appeal for US investment in Ireland Â
Despite a year marked by record inflation which created a global cost-of-living crisis the ability of Ireland to continue to attract foreign direct investment highlights the country's attractiveness as a country to do business.
Once again, Ireland's southern region featured strongly as a key location for US firms to expand their operations or to commence new partnerships. Across the Munster counties, local economies secured — and in many cases expanded — their strong association with US firms.
Apple, Analog, Johnson & Johnson and Eli Lilly were just some of the firms to announce major expansions of operations.
Despite the global impact that inflation had on the world economy North America remains the engine for foreign direct investment into Ireland. According to IDA Ireland, 167 investments were made here by North American-based firms last year. It dwarfs the 54 investments made by European firms and the 21 from other markets.
The investments added a net gain of 24,019 new jobs. To achieve this at a time when many western economies are at near full employment is an impressive achievement. It highlights the ability of companies to establish a presence in Ireland and also fill key roles with the right talent.
Job creation is also broadly based split between ICT firms, high-tech and traditional manufacturing, and financial services. There is a healthy geographic spread of the firms as well.
It is this diversity that has helped the economy further. The tech sector is currently undergoing a difficult period with many firms downsizing and reducing headcounts. However,s that is being countered by a strong pipeline of new investments coming from the multinationals and Irish-owned corporations in a range of sectors including life sciences, food and beverages, manufacturing and aviation.Â
Bodies like the IDA remain ambitious for further growth. There is a target of a 20% increase in IDA client expenditure in Ireland by 2024; and at least half of all FDI investments between 2021 and 2024 are expected to be located outside of Dublin.
As inflation impacts the Irish economy expenditure within the economy by FDI companies increased despite the challenging conditions. Payroll was up 9.8% to €19.6bn, Irish services and materials spend increased by 10% to €11.1bn and capital expenditure was up 8% to €9.2bn. This resilience and growth from FDI has been an important contributor to our economy and the national finances.
Currently, in Cork and Kerry alone there are more than 47,000 people employed in the FDI sector. Cork is home to seven of the ten largest pharmaceutical firms.
Throughout their history, investments by US firms in Ireland have often invigorated and sustained local economies outside the capital. Ford in Cork city more than a century ago is one of the earliest examples. But since then other US companies have selected regional locations which have served both the firms and the economies well; think Pfizer in Ringaskiddy, Eli Lilly in Kinsale, AbbVie in Mayo and Apple on Cork city's northside.
Over decades, the firms have become embedded in their local communities. In some cases, generations of workers have moved through their halls. The fact that many of these companies have expanded in 2022, one of the most economically challenging periods in recent times, highlights Ireland's enduring ability to be a successful location to do business.
Firms like Stripe are prime examples of this in that the company, through its founders have come full circle. Established by limerick brothers John and Patrick Collison in 2009 in San Francisco, the pair have brought the company home in a way and Stripe is now based both in Dublin and the west coast of the US.
Ireland's South West continues to offer benefits for FDI firms that the capital cannot. House prices in Munster are far cheaper and the global move to hybrid working models gives greater flexibility for working in more remote locations.Â
The significant number of universities means there are more than 41,000 students in higher education in the region.
The benefits that FDI has brought to the country are hard to underestimate. For the southern region, it has been truly transformative. Technology giants operating side by side with drugmakers have helped create an economic ecosystem that encourages innovation and something that will have an enduring legacy.
The arrival of companies like Ford, a century ago and the impact it has shows what FDI can bring to a region. Like all economies, the presence of foreign firms ebbs and flows with regular arrivals and departures but the benefit they bring will endure.
More recent expansions and acquisitions into Ireland by US companies include:Â
In March of last year, Analog Devices announced it would invest €100 million over the next three years in ADI Catalyst, its 100,000 sq ft custom-built facility for innovation and collaboration located at its campus in the Raheen Business Park in Limerick. The expansion will also see the creation of 250 new jobs by 2025. ADI Catalyst is a state-of-the-art collaboration accelerator where ecosystems of customers, business partners, and suppliers engage with ADI to rapidly develop industry-leading solutions.
In May, tech giant apple announced a further expansion of its campus on cork city's northside that will accommodate 1,300 new workers. The company had already invested €250m in the past five years in expanding its facilities here including the expansion to new premises in the city centre. with a presence in Cork for more than 40 years, Apple has grown to become the largest private employer in Cork, with approximately 6,000 employees. It supports wider job creation in Cork and across Ireland. Alongside Apple’s own growth, the company supports more than 30,000 jobs in Ireland, including 25,000 iOS App Economy jobs.
In November, Dell officially open its €2m newly redeveloped Customer Solution Centre at the company’s campus in Ovens. The ‘proof-of-concept’ site is a test bed for businesses and organisations worldwide to evaluate new technologies and solutions. One of 15 such centres globally, the investment further strengthens Ireland’s position as a strategic location for Dell globally. The company’s three campuses in Cherrywood in Dublin, Cork and Limerick have made Ireland a global hub for Dell in sales, services, centres of excellence solutions development, manufacturing, supply chain operations, engineering, IT and finance.
In October Eli Lilly received the go-ahead for a new €400m biopharmaceutical manufacturing facility in Limerick, creating more than 300 jobs. Lilly has been operating in Ireland since 1978 and currently has around 2,500 employees working across a manufacturing campus at Kinsale, a global business services centre at Little Island in Cork, and a commercial team dispersed across the country.
The company said it selected Limerick as the location for a project of this scale as the mid-west region has excellent educational institutes, a talented workforce and excellent transport infrastructure. The company plans to work closely with universities and colleges of further education in Limerick and the surrounding counties to draw from the abundance of talent in the region.
In March Johnson & Johnson announced a €35m investment in its contact lens manufacturing facility in Limerick, with the potential to create up to 200 new jobs over the next three years. Then in September, it announced an expansion of its existing facility in Plassey, Limerick. The €100m investment has the potential to create 80 new jobs. Johnson & Johnson Vision started operating in Limerick in 1996 with 60 employees. It recently celebrated its 25th anniversary in Limerick. In that time, the company has grown and is now one of the largest contact lens manufacturing facilities in the world, with a workforce of 1,600 people.
In August, medical device manufacturer Stryker opened its new high-tech facility at Anngrove in Carrigtwohill. The new 156,000-square-foot development creates capacity for 600 high-tech jobs in the future. The US multinational will soon employ 4,600 people across eight facilities in Belfast, Limerick and in its recently expanded base in Cork. Anngrove is also the worldwide headquarters of the AMagine Institute, which is the centre of excellence for additive manufacturing across Stryker. The institute develops breakthrough technologies, from early research and development to full commercial launch and scaling, and deploys these new technologies across its full portfolio of products and services.
In October, GE opened a new €30.5m manufacturing line in Carrigtohill. The new line, which has created 140 jobs, manufactures injectable diagnostic imaging agents (contrast media) used in X-ray and Computed Tomography (CT) procedures around the world. GE has had a presence in Cork for the past 30 years.
In March, Johnson & johnson's Janssen subsidiary announced an expansion of its biopharmaceutical supply chain facility in Ringaskiddy, Co. Cork. The €150m investment in the facility has the potential to create 180 new full-time jobs. This announcement follows a €300m investment in 2017, which saw the construction of a large-scale manufacturing suite at the site. This suite will shortly commence commercial operations, after successfully attaining all necessary manufacturing approvals. Continuous investment in the facility is serving to increase operational capacity to meet the demands of a growing clinic portfolio.
In August, the US-Irish drugmaker submitted a planning application to expand its development and manufacturing facility in Waterford. The planned facility is expected to create approximately 350 jobs over time adding approximately 320,000 square feet to its current 44,000 sq ft drug product (fill-finish) biologics facility. The firm, which focuses on medicines to treat rare, autoimmune and severe inflammatory diseases has had its Global Headquarters in Dublin since 2014.
In May, Merck announced it will invest approximately €440m to increase membrane manufacturing capacity in Carrigtwohill and to build a new manufacturing facility at Blarney Business Park, both in Cork. The investment, which is the largest in a single site ever for Merck’s Life Sciences business sector will create more than 370 permanent jobs by the end of 2027.
Software company NetApp, headquartered in San Jose, announced the opening of its new international headquarters in Cork. The office is in Navigation Square within Cork’s Docklands. The new international headquarters will serve NetApp’s international commercial, sales, and technology operations, expanding the company’s ability to support its global customers through a broad ecosystem of available technology, engineering, and software development talent. The new office is expected to accommodate up to 500 workers by 2025.
Biopharmaceutical company Abbvie announced in September, a €60m investment at its manufacturing site in Cork. The expansion, which will include the development of a new state-of-the-art facility, will create approximately 70 new jobs. New technologies will be introduced to the site in Carrigtwohill which will allow it to support AbbVie’s aesthetics business.
In September, formulation and manufacturing firm Ortec opened its European headquarters, manufacturing and operations centre in Newcastle West, Co. Limerick. The 26,000ft2 facility is a dedicated drug manufacturing facility.
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