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U.S. Multinationals Outsource to Ireland

Who's who in Irish foreign investment

Apart from its natural beauty and location just a 5 hour flight from New York, Ireland is generally chosen as an overseas home for U.S. multinationals because of its relatively inexpensive labor pool, English-speaking and educated workforce, corporate tax benefits and a superior local infrastructure. Additionally, some companies took advantages of the benefits of locating in Ireland prior to the elimination of trade barriers when the EU was established in 1993.
Pharmaceutical, biopharm and hi-tech companies have found Ireland to be most hospitable, especially when it comes to their low (12.5%) corporate tax rate and their advantageous patent income exemptions on royalties. These factors have been the driving force behind investment by pharmaceutical companies in the Irish economy, according to finfacts.com.
Big pharma company Phizer was one of the first U.S. pharmaceutical companies to find a home in Ireland in 1969. With over 2200 employees, Phizer produces Lipitor in County Cork, an anti-cholesterol drug that is the world’s largest selling prescription drug.
Prior to Wyeth’s merger with Phizer in 2009, Wyeth had a total of five facilities in Ireland which employed 3000 people. A large biotech campus was built in 2005 to house Wyeth’s drug development, drug substance and drug product facilities. Embrel, a rheumatoid arthritis medication, is produced in Ireland.
On March 15, 2011, Amgen, Inc. announced the purchase of a 37,000 square meter facility from Phizer in Ireland. While Amgen will continue to produce products for Phizer in the plant for an interim period, they will also begin manufacture of unspecified Amgen products in the future.
Eli Lilly has three facilities, two support service locations and one manufacturing site in Ireland. Since 1981, Lilly has produced cancer, diabetes and Alzheimer’s disease medications across Ireland.
Kinetic Concepts, Inc. established a manufacturing operation to make products for advanced wound healing and therapeutic support systems as well as tissue repair products in 2007.
Hi-tech companies such as HP, Dell, and Intel and games-maker Blizzard Entertainment have also located in Ireland. Industry experts have cited the Irish Software Engineering Research Centre at Limerick University which provides the skill sets and capabilities needed by hi-tech firms as one of the main reasons for their presence there. Through the Centre, Ireland has made a significant investment in the training and education of its workforce to meet the labor needs of these digital giants. Intel has its largest overseas manufacturing facility in Ireland and in January, 2011, announced a $500 million construction project at the Leixlip facility which will produce more than 800 jobs.
Amidst the economic turmoil which has been playing out in Ireland since 2008, the level of foreign investment has stayed fairly level. In fact, there are signs of renewed interest in investing in Ireland from multinationals. Just last year, Blizzard announced the opening of a customer support facility to provide customer service and in-game service for its computer games such as Starcraft and Wizard of Warcraft.