An industry that is here to stay

The pharmaceutical/fine chemical industry has been one of the most reliable sources of employment in this country over the last 30 years, with companies displaying longevity envied by many other sectors of industry. Matt Moran, director of the Irish Pharmaceutical and Chemical Manufacturers Federation (IPCMF) pointed to a number of ongoing expansions to support his view that the pharmaceutical industry is growing. "This growth is being achieved organically, which is quite an achievement considering that the wider European industry is contracting."

He pointed to three reasons for the reversal of this continental trend in Ireland. "The low rate of corporation tax is a major attraction. Also, the educational system has produced a high quality workforce and we have developed a critical mass. Many of the companies in this country have invested heavily to keep up with technology and are well positioned to develop new products." Ireland has been particularly successful in the fine chemical or pharmaceutical sector - there is relatively little commodity chemical activity - since it was introduced to this country in the late 1960s.

Mr Moran estimates that around one-third of those working in the industry are graduates in chemistry, chemical engineering, microbiology, biochemistry or general engineering. People with diplomas or certificates in various analytical skills are also well represented and, even for entry-level positions, companies are looking for a good Leaving Certificate with a science subject.

"Those who enter this sector are generally highly skilled and then put through rigorous training programmes. The ability of the workforce is extremely important in such a high technology, high value industry where there is no room for error.

"Like any industry, we are looking at potential skills shortages down the line. There are moves to promote the study of chemistry in school and, although there are many courses at third-level, there is room for specialisation in areas such as pharmaceutical technology. Some of the RTCs are looking at providing additional courses.

"Due to incentives, such as corporation tax, Ireland is a competitive location worldwide, but we have to keep our eye on the ball."

John Lloyd of IDA Ireland is full of praise for the pharmaceutical sector. "It's a very profitable industry creating highly paid jobs and we have never had a closure of an overseas-owned pharmaceutical company in Ireland. The statistics change, but we are host to around 15 of the top 20 operators in the world.

"Most of the major players are US-based and have rationalised their European operations. Ireland is a prime location - many companies are based here already, the skills are available and productivity levels are high - and a number of these plants are regarded as centres of excellence within their parent company."

Manufacturing pharmaceuticals is a profitable business and tax rates are a vital concern for these companies. "All the major firms have expanded considerably over the years and many represent total investment of £250 million or more," added Mr Lloyd.

The industry is not labour intensive - even the larger companies tend to employ no more than 300 people on average - although Warner-Lambert expects to employ 800 within five years (see below). However, indirect employment is significant and, while the companies may not purchase raw materials for their products in Ireland, overall spend on banking, accountancy and legal services is sizeable.

Warner-Lambert announced a £77 million investment in November, which will create 200 jobs over five years. Two months earlier the company had unveiled a £39 million project (backed by IDA Ireland) with the addition of 100 new positions. Carl Wheeldon, vice president of global pharmaceutical manufacturing at Warner-Lambert, describes Ireland as "a key global manufacturing and distribution channel within Warner-Lambert".

Construction of a new 312,000 square foot tableting facility is expected to commence early next year and recruitment of the first group of people in production, quality control and administration will commence towards the end of 1998. The plant will manufacture finished product from raw material produced by Warner-Lambert in Cork.

The pharmaceutical industry is showing stable growth all over the world, according to Padraig Sommers, managing director of Helsinn, which relocated earlier this year with the creation of more than 50 new positions. In common with Warner Lambert, the company is one of the few in the Irish market that produces complete pharmaceuticals in this country, rather than exporting incomplete products for finishing.

"Our industry is very mature. It is extremely complex and not given to periods of dramatic growth. There are so many products on the market that even massive growth in one area wouldn't have a major impact on the industry in general. Companies tend to look to the long term - it takes huge investment to get a product on the market."