February 3, 2008
Ireland must enhance its own industries as US firms pull outPosted in Celtic Tiger · 17 comments ·
Forty-three per cent of Ireland’s exports are dependent on the sexual urges, flabby boobs, thinning lips, laughter lines and crumpled foreheads of America’s millions of insecure baby boomers.
You’d never have guessed, watching the cosmetically enhanced creatures in Desperate Housewives last Tuesday night, that a boob-job factory could be in danger of closing.
On the contrary, such is the roaring demand for plastic surgery, expansion in Arklow rather than closure seemed more plausible. Yet last Wednesday morning, Allergan announced that it was moving its breast implant business to Costa Rica.
This is a worrying development because Allergan only bought the business two years ago. Up until then the silicone implant factory was run by a company called Inamed. Why, after only two years in a new plant, would the highly profitable American pharmaceutical giant decide to close?
Before we try to answer this question, let’s have a look at Ireland’s most profitable, yet most secretive industry – the pharmaceutical business. Most people can name Dell, Microsoft and Intel, but can you think, off the top of your head, of the names of the leading players in Ireland largest export industry? Well let’s take a little tour around the country to see where one of our most important industries is located.
Take Westport. Here in this small beautiful upmarket town the neurosis of millions of women has been eased. In the shadow of the mountain where St Patrick banished the snakes, a new miracle-maker banishes lines and frowns. This is where Joan Rivers will go when she dies.
Botox, the world’s fastest-growing drug, is made from minuscule amounts of the botulinum toxin and Westport is the Botox capital of the world. A discreet pharmaceutical building just off the Dublin Road, surrounded by trees, houses the original Allergan factory which manufactures the world’s most loved cosmetic treatment. Eight hundred people are employed in Westport and the factory’s turnover is over $1 billion a year.
Botox is the biggest employer in the town. Every time you turn on Desperate Housewives and marvel at Wisteria Lane’s smooth faces, pert boobs, lineless mouths and full lips, thank the Lord for middle-aged America’s neurotic fear of growing old, because it pays for your child’s classroom.
The cosmetic industry is one of Ireland’s biggest sources of tax revenue. Every time you hear Bree, Lynette, Gabrielle and Susan marvel at the great sex they are having with someone else’s ex-husband, count your blessings too because the Viagra that this stud is popping pays for our A&E wards.
Ireland is at the centre of an industry that is based on making Americans look and feel younger. We are a new age Tir na nOg – a mythical country that produces the elixir of life for another country that is afraid to grow old.
And it’s not just the Desperate Housewives. Six of the world’s top ten blockbuster drugs are made in Ireland, including the number one bestselling drug in the world, Lipitor, all of which is made by Pfizer in Ringaskiddy.
Last year the sales of Lipitor worldwide topped $13 billion, dwarfing Pfizer’s better known Viagra, which sold $4 billion. Viagra was originally developed to increase blood circulation to the heart to help prevent heart attacks in children.
After an adult trial in Wales, the impressive side effect became obvious and we haven’t looked back since. It’s turning up in the most interesting places: you can buy handfuls outside rugby matches off the same aul’ wans who sell cans of Fanta and Twixes out of prams. That’s the free market in operation. The boss of Pfizer in Ringaskiddy told me that apparently there was a roaring trade in Viagra at Puck Fair last year – which gives a new meaning to the expression ‘horny old goat’.
Pfizer is the biggest pharmaceutical company in the world with 10 per cent of a $500-billion market. The company invested $1 billion here in 2001. It costs $50 million a year to maintain it. The Ringaskiddy plant is a 24/7 operation where the staff work two days and two nights a week. Forty million tablets of Viagra are produced here per year. The active ingredients come in the front door and the Viagra goes out the back door, straight out to the docks for export, mainly to the US.
Of the top three drugs sold on the internet, Ireland makes two of them; Viagra and Sibutramine. Sibutramine is produced in Sligo – the surfing capital of Ireland. Just down the road from Strandhill, a cross between Hawaii and Bray, with surfers battling bumper cars for dominance of the seafront, the Abbott factory churns out millions of pills for the world’s Desperate Dieters.
This drug is marketed as Reductil and is the world’s most popular slimming drug. It works by inhibiting the signal from the brain which tells us we are hungry, suppressing the appetite and prompting rapid weight loss. Over eight million women are currently using it.
So it is easy to see that 43 per cent of Ireland’s exports are dependent on the sexual urges, flabby boobs, thinning lips, laughter lines and crumpled foreheads of America’s 78 million insecure baby boomers.
Ireland hosts 13 of the top 15 drug companies in the world. Their operations are substantial. In total there are 83 facilities, usually on hills outside major towns, employing more than 17,000 people. The IDA’s strategy of following the British garrison policy of concentrating foreign factories like garrisons all around the country, means that most parts of the island are involved in the pharma game.
The reason the Allergan decision is worrying is that, despite all this activity, Ireland is obviously losing its competitiveness. So what do we do? We can’t cut our wages to keep pace with Costa Rica – that would be nonsense. The objective of running a successful economy is to get the best wages for the most people.
The Allergan decision means that we have to innovate, we have to finance our own start-ups and keep the research component here. Now more than ever, we need domestic industry and domestic entrepreneurs to step up to the plate.
Over the coming years, there will be more Allergan announcements and the best way to respond to them is by building our own companies. Many people argue that the best thing that ever happened to Galway was the closure of the Digital plant because so many of the laid off Digital workers started up their own businesses using the skills they had learned.
Let’s try to do the same thing in Arklow and turn short-term defeat into long-term victory. It’s time for a new enterprise plan for Ireland.