Botox Injection for Irish Town Plots Route Out of Economic Mire
A small town in the west of Ireland
is getting an injection of Botox.
Allergan Inc. (AGN), the maker of the wrinkle-smoothing
treatment, said this month it plans to create about 200 jobs in
Westport in County Mayo over the next four years as the company
devotes as much as $350 million to its Botox manufacturing site.
After the investment, about 1,050 people will work for the
company in the town of 6,000.
The invigoration of a local community on the euro region’s
Atlantic edge offers a clue to the Irish strategy for emerging
from what the government calls the worst crisis since World War
II. Ireland is going back to the source of what turned the
country into western Europe’s fastest-growing economy before the
bust, attracting U.S. companies with its 12.5 percent tax rate
and supply of English-speaking workers.
“The multinational sector drove the initial element of the
recovery that came out of the austerity of the 1980s and early
1990s,” Austin Hughes, Dublin-based chief economist at KBC Bank
Ireland in Dublin, said in an interview. “There is no reason it
is going to be different now.”
About 100,000 people are employed by U.S. companies in
Ireland, providing direct and indirect benefits to towns across
the country as they struggle with an economy that has shrunk 15
percent since 2007. Unemployment has more than tripled since
then to 14.3 percent at the end of 2011, the Central Statistics
Office said last month.
Companies like Irvine, California-based Allergan are
“voting with their wallets” on Ireland, Prime Minister Enda Kenny, who is from Mayo, said in a speech in London this month.
Out of Work
Trouble is exporters tend to need fewer workers than, say,
stores or builders. As a result, they do less to reduce the
domestic unemployment rate. Joblessness in Ireland compares with
12.4 percent in Portugal and 18.5 percent in Greece, the other
two countries that were forced to turn to the European Union and
International Monetary Fund for aid during the debt crisis.
Nine of the world’s 10 biggest drug companies have
operations in Ireland, according to IDA Ireland, which is
responsible for winning foreign investment. While companies
backed by the state agency created a net 6,000 jobs, about
446,000 are out of work.
The slowing global economy also may hurt Irish efforts to
win more overseas funds. The IMF yesterday lowered its estimate
for global growth this year to 3.3 percent from a September
forecast of 4 percent.
Irish Drums
“We need more than Allergan to get the town back to what
it was,” said Sharon Carroll, 24, while shopping at Downtown
records in Westport, which sells CDs and bodhrans, Irish drums
that are priced at about 80 euros ($104) each. “There used to
be throngs of tourists around, not now. Since the recession
started there hasn’t been as many.”
Allergan first came to Mayo in 1977 and it began producing
Botox there about 20 years ago, said Pat O’Donnell, managing
director at the Westport plant.
About 850 people work at the plant in the town, which sits
at the foot of the Croagh Patrick mountain, close to the
Atlantic coast. Allergan has bought an adjoining site as it
prepares to expand.
The investment is good news because it means “people will
be spending a bit more,” said John McDowell, who manages the
Hewetson fishing supplies shop in Westport. “It’s been tough
times. The tourist season is shorter, and if it wasn’t for the
locals, you’d have to close the shop for part of the year.
You’re grateful for every meter of rope you sell.”
Smoothing Lines
Botox has been used in the U.S. since 2002 as an injection
to smooth frown lines. The drug, which generated about $1.6
billion of sales last year, also is used to treat conditions
such as such as chronic migraines. Sales of the drug may rise to
about $2 billion in 2013, according to the median estimate of 12
analysts surveyed by Bloomberg.
“The well-educated population, the proximity to key
markets and the competitive corporation tax rate continue to
make Ireland attractive,” O’Donnell said in an interview at his
office in the factory. “There would be a lot of people in the
company, husband and wife, father and son, mother and daughter,
who work here.”
Allergan also may help curb the outflow of people from the
region. Irish emigration rose to the highest since the 19th
century in the 12 months ended last April, with about 76,400
people leaving Ireland during the period, according to the
Central Statistics Office.
Ireland ranked ninth as a destination for foreign direct
projects in Europe in 2010, the year it sought a bailout,
according to a study by accounting firm Ernst Young. Neither
Greece nor Portugal makes the list, and Ireland ranks ahead of
Switzerland.
“The Allergan jobs have given a lot of people here more
hope, especially young people,” said Mary Salmon, a barmaid at
the Porter House in Westport, as three customers sipped pints of
Guinness. “At the weekend when the bar is busy, you can be sure
that the drinkers either work for Allergan or they are relatives
of someone who does.”
To contact the reporter on this story:
Colm Heatley in Belfast at
cheatley@bloomberg.net
To contact the editor responsible for this story:
Colin Keatinge at
ckeatinge@bloomberg.net
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Article source: http://www.bloomberg.com/news/2012-01-25/botox-injection-for-irish-town-plots-route-out-of-economic-mire.html
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