Roche’s €27.5m on wages and pensions

WAGES, salaries, social insurance and pensions cost Roche €27.5 million last year, it emerged this week.

According to company accounts filed for the financial year ended December 31, 2015, Roche Ireland Limited spent €20.7m on wages and salaries; €2.2m on social insurance; €3.5m on defined benefit pension service costs and €977,000 on other benefits. The total figure is up from €24.8m a year earlier.

It has also emerged that a majority of employees have taken a generous redundancy package of six weeks wages from the company, plus two weeks statutory redundancy, depending on years of service as part of their exit compensation. All of this is capped at a maximum of 2.5 years wages.

A small number of employees, believed to be in the region of 10%, have secured jobs in other pharmaceutical companies.

SIPTU industrial organiser Paul dePuis believes all the redundancies will be on a voluntary basis. However, if the company does not secure the number of voluntary redundancies it requires, Mr dePuis said any compulsory redundancy would be based on a “last in, first out” basis.

Mr dePuis is hopeful that the company will secure an alternative buyer or secure a reversal of the closure decision before their planned exit in 2019.

“The Clarecastle plant is an attractive site for an investment. It is ideally located near Shannon International Airport. It would be a devastating blow to lose this type of industry for the Clare and Mid-West economy if another buyer can’t be found.

“We don’t know what will happen in the marketplace over the next three years. All interested parties need to redouble their efforts to preserve the plant or secure a long-term replacement industry,” he said.

The accounts recently lodged with the Companies Registration Office for Roche Ireland Limited show that Roche took a €130.98m writedown last year, following its decision to close the plant.

The accounts show that the Clarecastle operation reported a €130m loss last year, compared with a €9.6 million profit in 2014. The company directly attributed the loss to a €130.9m impairment charge related to property, plant and equipment connected with its Irish manufacturing facility.

A decommissioning provision of €4.4m was recorded in 2015. According to the accounts, this provision is an estimate of the ultimate liability that is expected to arise and is discounted to reflect the time value of money.

“This estimate is inherently judgemental due to uncertainties related to the method, timing and extent of decommissioning. The estimate could change substantially over time as new facts emerge”.

The Irish subsidiary received a capital contribution of €28m from another Roche group entity since November and continues to receive funding “on an ongoing basis” from the Roche Group under its cash pooling arrangements.
The accounts state that it had net current assets of €16m on December 31, 2015.

On this basis, the directors don’t consider that any material uncertainty exists in relation to the company’s ability to continue as a going concern and, accordingly, the financial statements have been prepared on a going-concern basis.

The company’s Irish unit also received a €1.4m capital grant from IDA Ireland, which the group said it had repaid in full, as it was no longer able to comply with the terms of the agreement under which the grant had been issued.

Dan Danaher