Little hope for Little Island?

Pfizer was bullish yesterday in its hope for a sale of the Little Island plant – a move that would protect the 136 people working there.

Paul Duffy, the man in charge of Pfizer's manufacturing operations here, highlighted its "capable, competent, well-trained workforce", which would be "an asset to an acquiring company".

The company also pointed to its previous successes in finding buyers for redundant plants. These include Amgen taking over its Pottery Road business in Dún Laoghaire; Biomarin acquiring the Shanbally site; the sale without job losses of the Fort Dodge animal-health business in Sligo to Lilly's Elanco; and the sale of another plant at Loughbeg to Portuguese contract drug manufacturer Hovione, which protected some jobs there.

However, Dún Laoghaire and Shanbally had together had €430 million invested in them shortly before the decision was made to pull the plug. Both had been earmarked as biologics operations sites before Pfizer acquired Wyeth in 2009. That brought Wyeth's state-of-the-art biologics campus at Grange Castle into the group. Continuing to use Pottery Road made little sense for Pfizer but it was an attractive option for a company like Amgen, which was establishing a toehold in Ireland. The same went for Biomarin in Shanbally. The Fort Dodge plant was simply one element of an entire animal-health business acquired with the Wyeth deal and subsequently offloaded.

Most notably, in the Hovione deal, only 50 of the 230-plus jobs were saved.

Little Island is an older plant, but that’s not to say it has no hope of finding buyers. There is a growing business in generics and it is one the IDA is not ignoring. Little Island could help tempt more inward investment from generics manufacturers. But as Hovione shows, it might not be enough to preserve the current level of employment, even if successful.

Leaving all that aside, the picture for jobs in the pharma operations Ireland once attracted is looking grim.The patent cliff, global oversupply of capacity and the impact of recession are all hitting the sector and, without the consumer demand and margins that patent protection brings, these activities can increasingly be done in lower-cost economies.

While yesterday's announcement is good news for Ringaskiddy, bolstering its production, it too is an old plant. The 450 workers there can expect further pressure on productivity if they do not want to follow the example of
Little Island.