Irish Business News, June 29, 1998

Jobs boom looks set to continue

by Barry Cummins
OVER 4,000 new jobs in the electronic and technology sectors are to be created at Blanchardstown in north west Co. Dublin within the next five years.
Local industry sources say the jobs will be created in both existing multinationals in the region and in other foreign firms who view Blanchardstown as one of the best places in the country in which to locate.
The areas of proximity to Dublin Airport and the M50 motorway has proved very popular with large multinationals, including computer technology leaders. Many of the 4,000 new jobs are expected to be filled by graduates from a new Institute of Technology to be located in Blanchardstown. Fingal County Council and the IDA are currently involved in discussions with a view to develop a business and technology park in the area. An appropriate site has been located at Buzzardstown in Blanchardstown and building of the institute, which will be located over 45 acres, is due to begin next year.
The link between local industry and the Institute of Technology has already been formed. The Vice President of 3-Com Corporation, Donal Connell, is chairman of the government appointed board charged with overseeing the establishment of the new IT. The company currently employs over 1,350 workers at its premises in the IDA business park in Ballycoolin, Blanchardstown. Fellow US company IBM currently employs over 400 people at its call centre in Blanchardstown which has a target employment level of 750. At its manufacturing plant in nearby Mulhuddart, IBM intends employing over 2,800 when the plant is at full production.
Although other types of industry, such as pharmaceutical company Bristol-Myers Squibb employ hundreds in the area, it is the high concentration of computer technology firms in Blanchardstown that has led to the area being renamed locally as Ireland's Silicon Valley.
Donal Connell is convinced that the current employment levels in the technology sector will increase even further. "When 3-Com started here in 1991, we expected that by 1996 we would employ 175. We now employ over 1,350 people in Ballycoolin. Our story is a great success story but it's not unique. I would expect that in the greater Blanchardstown area, employment levels in the computer technology industry will effectively double within five years."
The Fingal county area, which includes north and north west County Dublin has received more IDA investment than any other area in recent years. Between 1990 and 1996, the percentage increase in employment in the Fingal County area was 158%, compared to a nationwide average of 32%.
While employment levels among the people of Blanchardstown have risen dramatically in recent times, a sizeable number of jobs in the area have gone to people in nearby counties Kildare and Meath.
Donal Connell believes the new Institute of Technology can help to include more people in the business boom.
"As our employment opportunities increase, all of the computer technology firms will be looking at applicants from Leaving Cert standard to college graduates," he said.

Pudding puts company
in the big league

by Trish Dromey
ALTHOUGH black and white pudding was once seen purely as an ingredient in a fry it has now become a very fashionable item which can be found appearing in all types of dishes in high quality restaurants.
For West Cork company Michael Staunton and Sons Ltd the increasing popularity of traditional puddings has led to development of a thriving business which now has plans to establish its brand as a well-known product throughout restaurants and supermarkets in Ireland.
Winning the Best Deli product at the Tesco Ireland Food and Drinks Awards this month has been a major step in the right direction and StauntonUs puddings will now receive a listing in each of the 77 Tesco Ireland stores as well as in its top 200 UK outlets.
The company which now employs a staff of 25 at a purpose built 1800 sq metre facility in Timoleague has evolved from a traditional butcher shop where Michael Staunton began making puddings and sausages in 1954.
During the 60s and 70s he began supplying supermarkets in Cork city and county and set up the company in the early 80s when his sons joined the business.
As sales expanded a decision was made to close the butcher shop and build a manufacturing plant to develop the wholesale business. This began operations in 1985 with a staff of ten.
The advent of new EU manufacturing regulations coupled with the fact that the existing plant had reached full capacity by the early 90s led to the construction of the new facility.
This was built to HACCP standard and the company also applied for and received an export licence. The focus since then has been on developing sales of black and white puddings which are now sold in Cork, Kerry, Dublin, West Ireland and some outlets in London.
The firm also continues to sell a variety of pork products including sausages to outlets in Cork and is planning to launch a new range of gourmet sausages in the coming months.
The company now has an annual turnover of between £1.5m to £2m and is being run by Michael Staunton's three children. Anthony is Managing Director, Fachtna handles sales and Theresa is responsible for marketing.
Ms Staunton attributes the success of StauntonUs puddings to the fact that they continue to use the traditional recipe which has a high meat content. "All our products are 100% pork based and each pig is sourced from a five mile radius of the plant which ensures traceability,''she added.
The company has won several awards including the Irish Master Butcher Federation Pudding of the year and Munster sausage .
Winning the Tesco award has been a major boost and guarantees that the product will be listed in its stores for a minimum of nine months.

Film sector worth £21m

by Mark Gallagher
OVER 2,300 people were employed, either directly or indirectly, in the audio-visual industry in 1996, an economic report by IBEC has revealed.
The total output of the Audio-visual industry amounted to 122 productions, of which the budget was £97 million.
Once again, the government has received a good return on their support for the industry.
"The main government support for the industry is tax relief on section 35 investment. These amounted to £40 million in 1996 and the cost to the Exchequer in terms of tax foregone was estimated at £15·1 million," IBEC Audio-visual Director Tommy McCabe said.
The return to the Exchequer in terms of taxes from the income and spending generated by the industry amounted to £21·1 million.
Mr McCabe called on the government to increase the funding for the Irish Film Board to enable it to assist further expansion of the indigenous film sector.
Looking toward the forthcoming budget, Mr McCabe said that a crucial factor for the audio-visual industry was the retention and expansion of Section 35. The section is up for renewal in April 1999, and Mr McCabe urged the government to retain the section.
He also called on the Government to restore to 100% from 80% the proportion of eligible expenditure which can be set against tax.
The industry strongly supported the recent initiatives of Minister Sile De Valera in securing the funding for the Screen Commission of Ireland.
The compilation of the report was drawn by a Steering Committee comprising of IBEC, Irish Film Board, RTE´, TnaG, Film Makers Ireland, Revenue Commissioners and the Department of Arts, Heritage, the Gaeltacht and the Islands.
1996 was a successful year for the audio-visual industry with such films as I Went Down, The Serpent's Kiss and The Butcher Boy, all of which were critically acclaimed and won many awards.

Development land a very taxing issue

THE general rate of capital gains tax dropped from 40% to 20% with effect from December 3, 1997. The primary exception to this reduced rate was in relation to development land gains, which remain at 40%. However, recent changes introduced in the Finance No 2 Act 1998 have reduced the CGT rate to 20% on certain development land gains.
Several issues should be addressed by any individual acquiring or disposing of what may be regarded as "development land". Development land means any land, the value of which exceeds its "current use value". Current-use value implies the value whereby it would be unlawful to carry out any development on that property in the future. This does not necessarily imply agricultural value. For example, there may already be certain existing works carried out on the land or there may be an existing building involved.
Assuming it is development land, the next question is whether the disposal will be subject to capital gains tax, income tax or corporation tax. CGT will only apply if the person disposing of the land is not considered to be a person dealing in or developer of land. The most obvious example would be a builder who would hold such land as stock and trade. The issue becomes much less clear where an individual occasionally buys and sells land or in fact is making only one such disposal.
Assuming the transaction falls within the CGT net, then, the following legislation changes would be relevant. Gains on development land disposals from April 23, 1998 to April 5, 2002, which on the date of disposal has planning permission for residential development, will be liable at 20%. Disposals of land in that period to a housing authority for the purpose of the housing acts qualify for the 20% rate whether or not the land has planning permission. After April 5, 2002 the above mentioned disposals will be subject to CGT at 60%.
Many questions arise as to whether the land will qualify for the 20%. The legislation does not require that the land be serviced. Further, outline planning permission will be sufficient, provided it is residential. Many contracts are drawn up conditional on planning permission being obtained. Sale of land subject to such condition will qualify for the 20% rate. The 20% rate should be available whether the vendor or purchaser obtains the planning permission, depending on the contract terms.

Second firm bids to buy airline

by Kevin Barry
A SECOND company has dramatically entered the race to buy TEAM-Aer Lingus as staff at the Dublin plant prepare to vote on a takeover package offered by the Danish company, FLS Aerospace.
An Aer Lingus spokesman confirmed yesterday that an approach has now been made by GPA Expressair, based in The Netherlands and owned by former executives of Tony Ryan's GPA company in Shannon.
Aer Lingus says that GPA Expressair's approach will not be considered unless the FLS takeover falls through.
Just 41% of TEAM's 1,540 workers voted to accept the FLS package. A second ballot will be held by July 1 and TEAM management express confidence that there will be more support after FLS chairman Steffan Harpoth assured staff that there will be no lay-offs.
Minister for Public Enterprise Mary O'Rourke is also said to be confident that the deal with the Danish company will still go ahead.
The fact that Aer Lingus is allowing TEAM workers to retain their pensions after transferring to FLS is considered crucial in prompting a positive outcome.

IBEC announces appointment
of woman director

IBEC have announced the appointment of two new directors, Jackie Harrison and Brendan Butler.
Jackie Harrison, who becomes Director of Enterprise, is the first woman to become a director of IBEC. She is director of the Engineering Industry Association, the Irish Clothing Manufacturers' Federation and the Irish Textile Federation. Brendan Butler is the director of the SFA and becomes Director of Social Policy.

Company to guide musicians

A COMPANY has been set up to guide aspiring musicians through the pitfalls that await them in the industry.
Confidential Advice Bureau, CAB, it is the brainchild of Suzanne Lappin, who hopes to make key players in the musical industry available for consultation with those who need advice.

Eircell announces 15 partnerships

EIRCELL recently announced new partnership agreements with 15 companies where subscribers to Eirecell's Visa Card and Talking Points Programme can cut the cost of their mobile phone bills
10,000 people have signed up to the programme since its inception in October 1997.

Engineering conference plan

AN international engineering conference was pre-launched in UCC last week. Entitled "Managing future projects with innovative delivery techniques", it is jointly organised by Jacob's Engineering and ISA Ireland and is being held in The Maryborough House Hotel, Cork, next September.
Declan Jordan was recently appointed president of ISA Ireland.

Award plans for websites

FINFACTS, acknowledged as the leader in Irish business information on the World Wide Web, are launching an award programme for Irish business websites later this year.
Finfacts have advised companies should be attempting to provide Internet services now, when the Internet is in its early hype stage, rather than at a more mature stage.

Tented retail area sold out

THE large retail area for Ford Cork Week, known as the tented city, has been completely sold out. Exhibitors will include specialist clothing companies, sailing shoe providers, a bank and the West Cork Fuschia Brand — the new quality brand to promote products produced in West Cork.
There will also be a craft village and technology companies will display their wares.

Engineering plant is opened

O'DONOVAN Engineering were praised for their hard work, innovation and commitment by Teagasc at the opening of their new plant in Coachford, Co. Cork.
Their factory and staff provide a comprehensive range of engineering services to other industries. They also received the ISO9000 certification for excellence.

Year 2000 gap in market exploited

A NEWLY formed Cork software company, ABU, have developed a Year 2000 tool for COBOL programmes. They identified a gap in the Year 2000 market, exploiting it by developing this tracker tool.
Numerous bugs are expected to appear on systems around the world in the first days of the year 2000. The tool, named TrackerCDN, takes the time out of the arduous task of the Year 2000 conversion process.

Rotofab wins Forbairt award

ROTOFAB Ltd, Athlone, have been rewarded for six years of success by being selected as the Forbairt Company of the Month for June. The company specialises in high quality rotational moulding for both national and international industry.