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Bruton defends corporate tax

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IRELAND’S corporate tax, a target for some other countries, will be stoutly defended, Minister Richard Bruton said in Shannon last Friday.

The Minister for Jobs, Enterprise and Innovation was in Shannon to mark the announcement by Zagg International Distribution Ltd and Cregg Logistics of the creation of 300 jobs.
“We are determined as a Government to emphasise how important the corporate tax rate is to the long-term development of an export-led recovery. There are many in other countries who have questioned whether that is the right approach but our Government is determined to defend that tooth and nail. It is vital for US companies and other companies investing in Ireland that they have that certainty. If you talk to the IDA, one of the strengths that they can sell is that no matter how politics changes, there is certainty in the way in which international investors are treated in respect of their corporate tax regime. I think that’s vital and we are determined to protect that,” he said.
The minister said that the corporate tax rate was likely to be very important to Ireland’s recovery.
“Zagg MD Brian Packer in his statement today drew attention to the importance for their decision to have certainty around corporate tax and I think it is very important that we in Ireland take notice of that and the Government absolutely understand it and we have to create that wider understanding in the rest of Europe. The way that Ireland can meet its obligations is through driving an export-led recovery.”
He said there is a lot to be optimistic about, despite the current economic conditions. “We did undoubtedly make mistakes in recent years, we took our eye off the ball to a degree. People got fascinated by the bubble around property but the core strength of the Irish economy remains. That is a strength built on enterprise, enterprises of all sizes from overseas and here at home. I think we’ve every reason to be confident for this country looking ahead.”
The new Government has taken a positive approach to fixing the banking crisis, he added. “We’ve taken decisive action to deal with some of the problems that have weighed us down in recent years. The Government has now acted decisively in respect of the banks and we will now see at long last the emergence of two pillar banks, that have a good sound capital base, that have a low loans-to-deposit ratio and will have the capacity to lend €12 billion into the Irish economy each year. That is a huge transformation of the banking landscape.
“We need to build on that and the Government is to introduce a jobs initiative during May to build on that to create the chance for smaller businesses to get the relief they need. Lower rates of VAT, lower rates of PRSI, they can make a real difference for companies who are in need of a boost to get through these difficult times,” he said.
Much of the competitiveness lost in the boom has been restored but the process needs to continue, the Dublin North Central TD claimed. “The challenge that we have in Ireland is to create an engine that can drive recovery. It won’t be done without significant change in many areas of the economy. Access to finance has to be corrected, we also need to get our cost base right and there have been very significant changes over the past two years in bringing down our cost base. The IDA can now go abroad and say that in many cases we have had a 10% relative improvement in wage costs.
“We’ve had significant improvements in other parts of our cost base and we have to continue to build on that and we need to make sure we are competitive with those we are competing with,” he added.

 

Fast progress from young firm

Established in 2005, Zagg has grown at a ferocious pace, its managing director Brian Packer told the public in Shannon on Friday.
Outlining the company’s development, he said the company had started on a tiny scale.
“To understand how we ended up here, I’ll tell you a little story. About six years ago there was a young man who had just been given a very nice watch and he didn’t want to get it scratched.
“His father-in-law had access to a film that had been designed for the US military to protect the leading edge of Apache helicopter blades to prevent them from getting damaged when they would land in desert. It’s a really tough, clear thin protective film and it had only been used for this purpose before. This kid took it home, put it on his watch and started showing it to his friends.
“He started a little business and from this innovation, it began in his parent’s garage. Soon after he found that it had grown beyond what he could handle because things had come out like the new I-Pod nano and he had designed a way to cover the entire device. He was doing smart phones and things on those lines. Soon after he went to a person called Robert Peterson, who is our current president and CEO, and he partnered with him and the company started,” he said.
Mr Packer said that a range of new electronic products are coming on the market, which is good news for Zagg. “All the new screen-type devices are coming out – blackberry, HTC, Motorola – everyone is coming out with new tablet devices, there will be nearly 20 new ones by the end of the summer so it’s a great time for a company like us to be expanding into this market. We’ve been looking to expand into Europe for some time,” he added.
He said Zagg had been very impressed by Cregg Logistics. “We narrowed it down to five different countries and we were trying to determine which was going to be the best when the folks from Cregg Logistics got a hold of us. Coming over here, seeing this beautiful country, meeting a great company like Cregg Logistics, the type of company we had partnered with in the US, we knew immediately once we met them that we had a company we could partner with.”
Equally, Mike Neville of Cregg Logistics said he had been very impressed by Zagg. “I have been impressed with them since we first engaged. When we visited Zagg in Salt Lake City last October, they opened their doors and showed us every aspect of their business. We knew we were dealing with a genuine and seriously professional company who were going places,” he said.
Shannon Development CEO, Dr Vincent Cunnane, praised the two companies involved. “Zagg and Cregg are two companies with very sound business backgrounds, prime examples of the type of innovative companies we’re trying to attract here and to have them here today is wonderful. Zagg have grown dramatically, they’ve doubled their turnover year on year since establishing in 2005.
“It’s some achievement to grow at that pace and to keep everything in line,” he added.
He said Ireland’s low corporate tax rate is crucial to attracting companies to Shannon. “To hear the minister (Richard Bruton) speak so robustly about corporation tax is very reassuring, corporation tax is top of our agenda when we go to meet these companies.
“There’s lots of other things that are important but corporation tax is at the heart of our sell to new companies and we need to continue to have that if we are to build our way out of this and ensure we have new companies coming in order to have export-led growth,” he added.

Much-needed ­employment boost

CONFIRMATION of a badly needed employment boost for Shannon arrived last Friday.
Minister for Jobs, Enterprise and Innovation, Richard Bruton, was at the Park Inn when it was announced that a collaboration between US company Zagg International Distribution Ltd and Cregg Logistics will create around 300 jobs with the support of the Government through Shannon Development.
Zagg International Distribution Ltd, a wholly owned subsidiary of Zagg Inc, an American company with its headquarters in Utah, will create 40 jobs over the next five years at Shannon Free Zone. The new company will carry out the sales and marketing, product design and administrative activities of the European expansion of Zagg.
Zagg’s operating model in the US is to partner with a logistics company who carries out all the manufacturing, assembly, packaging and logistics on their behalf. They are replicating this model in Shannon and have partnered with Cregg Logistics, who will produce their InvisibleShield and Zaggskins for personal electronic devices such as phones and laptops. Cregg has established a new company to work in partnership with Zagg International Distribution Ltd at Shannon, creating 130 new jobs within two years.
At the launch, Minister Bruton said, “Today’s announcement is great news for Shannon and great news for Ireland. The decision by these two companies to announce these jobs today is a massive vote of confidence in the region and the Irish economy. I know the company was considering other locations for this investment and I commend Shannon Development for their work on this project.
“Government does not create jobs; businesses like Zagg and Cregg do but government’s role is to create an environment in which companies like these and others can grow. I am developing plans to achieve growth in the economy and to create and protect jobs through reducing costs for business, improving access to finance and in innovation and R&D. I will be pushing for these measures to be introduced in the jobs initiative at the end of May and I have also started to develop an ambitious long-term strategy to reform the Irish economy and create real, enterprise-based growth again,” he said.
Zagg MD Brian S Packer commented, “Zagg International is very excited to grow our business in Europe, the Middle East and Africa from our new Shannon hub. There are many reasons why we picked Shannon but Ireland’s competitive corporation tax definitely sealed the deal. We will be manufacturing, shipping, marketing and selling our products from this base and will be creating job opportunities, both directly and indirectly, over the next few years, as we have at our US headquarters for Zagg Inc. While we will be recruiting for a number of key positions, the majority of jobs will be created indirectly as Zagg International will create a good number of jobs through our partnerships and key vendors such as Cregg Logistics. In total, we expect over 300 jobs to be created over the next four years.”

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