The Glaxo expansion in Dungarvan, where 50 new jobs will be created, is welcome news in the current economic climate. It makes a change from building site lay-offs and manufacturing redundancies. Minister Martin Cullen announced details of the expansion last week as he performed the opening ceremony with Glaxo Smithkline Chairman, Sir Christopher Gent.
GSK will grow its tablet production volumes up to 12 billion from 9 billion per annum. The Dungarvan plant makes Panadol, Coldrex and Solpadeine, all well-known over the counter drugs that are in high demand and are household names.
A total of 80 per cent of Panadol production worldwide is made in Dungarvan which is a great boast for the county town. The success of the Dungarvan tablet plant has led to this investment. Following a takeover, the company has another plant in Dungarvan, a dental care operation that makes tooth brushes, Polident, Poligrip and Corega.
Pharmaceuticals production is an industrial sector where Ireland has great success.
Here in Waterford and the south east we have many major firms operating, such as Teva, formerly IVAX, Genzyme, the Biotechnology firm in the city are expanding also and not far away in Clonmel there is Guidant and Abbott and Merck Sharpe and Dohme on the Carrick side.
Rising costs in Ireland are affecting some sectors of manufacturing, but in the pharma sector, labour cost is a much smaller element of the cost of the product.
Quality control and hygiene are critical so that high international standards are achieved and we in Ireland and the south east seem to be able to meet those conditions.
UK tax changes are also leading to some companies reviewing their location. A rival pharma firm to Glaxo in the UK called Shire is thinking of making Ireland its HQ for tax reasons.
Could Glaxo SmithKline do likewise, this was hinted in a UK Sunday newspaper report last week.
Shire are moving to Dublin for their headquarters, where it is expected they will benefit by saving tax under the Irish tax laws compared to the UK.
This may not please the Labour Government in the UK under Gordon Brown and Brian Cowen could lose an ally in the tax battle in Europe with France and Germany anxious also about Irish tax breaks and jobs moving away from their countries.
The issue was raised last week by Mr. Barosso, The European Parliament President, who said Ireland had little to fear and should vote yes for Lisbon.
Could that possibly change? In the meantime, other UK firms could follow the Shire Example.
If Glaxo were to move its head office to Dublin, as suggested over the weekend and given their strong manufacturing facility in Dungarvan, could they be persuaded to have some of their back office activities in Dungarvan or Waterford?
The IDA Business and Technology Park has much space to accommodate leading edge firms like Glaxo Smithkline.
Dungarvan does back office work for Glanbia and this works successfully so the precedent is there.
Some more marketing of the area’s potential to major corporate entities like
these big pharmaceutical to try and bring over more of their work is required. There have been complaints that there have not been enough site visits from the IDA with prospective investors to Waterford.
Glaxo are in Ireland since 1975, where they established a factory on the edge of Cork city, where 500 now work. Due to the success of the company’s products in Ireland over 240 work in sales and marketing division in Dublin.