The number of Indian companies investing in Ireland through IDA Ireland has doubled in the last three years, from 15 companies in 2013 to around 30 today but John Conlon, Executive Vice President - Asia Pacific, IDA Ireland would like to win more new investments from India. In conversation with Viveka Roychowdhury, he explains that while mergers between biopharma companies might lead to exits and facility shut downs, he is confident of finding takers for any Irish biopharma plants that might come up for sale
The number of Indian companies investing in Ireland through IDA Ireland has doubled in the last three years, from 15 companies in 2013 to around 30 today but John Conlon, Executive Vice President – Asia Pacific, IDA Ireland would like to win more new investments from India. In conversation with Viveka Roychowdhury, he explains that while mergers between biopharma companies might lead to exits and facility shut downs, he is confident of finding takers for any Irish biopharma plants that might come up for sale
With the referendum on Britain’s exit around the corner, how would a Brexit impact Ireland?
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Ireland’s stated position on this issue is that it wouldn’t be good for the UK to leave the Eurozone. It wouldn’t be good for Europe for the UK to leave. And it wouldn’t be good for Ireland if the UK leaves the Eurozone. So we would be very supportive of the UK remaining in the EU. Ireland and the UK have a very close relationship, especially from a commercial point of view, as it is our biggest market. But that’s a decision for the UK electorate to make.
In the context of Tata Steel deciding to exit the UK, how does Ireland handle such exits, in terms of ease of doing business?
Even as some companies might exit Ireland due to a change in business imperatives (an example being a small unit of Reliance Lifesciences which will close down over time due to an amalgamation with the company), I am confident of finding takers for any pharma manufacturing facility that might come up for sale. Biotech facilities coming up for sale in Ireland are rare so finding buyers would not be a problem. There is also a rationalisation of API plants worldwide, thanks to the mergers between large companies. Such transactions would result in a consolidation as the companies seek to extract value by reducing cost and one way of doing that is to reduce the number of facilities. We’ve been very lucky in Ireland (on this front). For example, as a result of Pfizer and Wyeth’s amalgamation, and other acquisitions that Pfizer did, Pfizer sold their Dublin facility to Amgen. So that rationalisation brought another famous lifesciences company to Ireland.
Similarly, we already have a number of companies, both Indian and global, expressing an interest in Ranbaxy’s facility in Ireland, which Sun Pharma is looking to offload (post the merger). Besides Ireland’s track record in the lifesciences sector, we also offer business friendly labour and exit laws which allow smooth management changes.
What does Ireland offer investor companies?
The trend is for companies to use Ireland to develop new products and access the EU market. For example, one of the companies I met on my trip in April to India is a medical device company which wants to access the EU market. So, they would be looking to establish (an) R&D and European base in Ireland.
How does Ireland fare as a destination for FDI, specifically from global biopharma majors?
There are 1250 IDA assisted overseas companies that have set up in Ireland, across sectors, employing around 190,000 people – an all time high presently. There are, however, more if you include non-IDA assisted companies. Around 50,000 people are employed in the life sciences sector, split equally between pharma and medical devices. Nine of the world’s top 10 pharma companies have a base in Ireland, with € one billion additional investments coming in the biopharma space in the last two to three years from the likes of Regeneron, Eli Lilly and, more recently, from Shire.
From an export point of view, our GDP (in 2015) is €214.6 billion, of which nearly € 90 billion is from exports. IDA assisted companies contributed €124.5 billion to this GDP. Pharma and chemicals make up 27 per cent of exports out of Ireland, while medical devices make up six per cent. Pharma exports were €64.2 billion in 2015 while medical devices exports were €14.3 billion.
Ireland has around 75 pharma companies, both generic as well as innovator, with 33 US FDA approved pharma and biopharma plants. About 30 Indian companies have a presence in Ireland across sectors, with Wockhardt and Ranbaxy among the larger pharma companies.
What has been the growth in IDA Ireland’s business, specifically from India, over the years?
70 per cent of the IDA Ireland business comes from the US, 20 per cent from Europe and the remaining 10 per cent from the Asia Pacific region. Our goal is to grow this business but obviously this is a long term project, spanning 5-15 years. All our large investments come from companies that are already located in Ireland. Our goal is to get as many new Indian companies to invest in Ireland over time. And this takes time from the point of view that you have to find the right Indian company with the right fit. We are building the business year-on-year, so the Indian market would be very important to us.
In 2013, around 15 companies from India across sectors had invested in Ireland through IDA Ireland and today we have close to 30, with Wockhardt and Ranbaxy among the larger pharma companies, employing in excess of 3000 people. All of these companies are growing, which is proof that Ireland is a good location for Indian companies.
Ireland has both, big generic as well as research driven pharma companies, and thus reflects the global nature of this industry. Ireland’s track record of clinical and academic research excellence and its geographical location as a base in the EU region are two attractive features of the country for Indian companies.