JAMES HARDIE LATEST TO BENEFIT FROM CORPORATION TAX RATES - Another international company is moving to Ireland to benefit from our low corporate tax rate. James Hardie is an Australian construction materials company that has been headquartered in the Netherlands since 2001 because of a beneficial tax agreement the Netherlands has enjoyed with the US. The US is James Hardie's biggest market. But because that agreement is no longer so easy to access and because James Hardie has decided against returning home, it has decided to base its headquarters in Ireland.
Michael Janda, a business reporter with the Australian Broadcasting Corporation, says that James Hardie is one of the largest building materials companies in the world, whose main market is in the UK where it makes about three quarters of its sales. It was based in Australia before moving to the Netherlands in 2001, amid a lot of controversy. In the past, it made mostly asbestos-based products and many of its employees had gotten sick as a result. A compensation fund was found to be under-funded and some of the Australian state governments actually boycotted the firm's products for a time. They wanted James Hardie to provide proper funding for the compensation fund.
The Australian journalist says that is why there is some suspicion surrounding the company's latest move to Ireland. However, he says that James Hardie has assured investors and the Australian media that the move to Ireland is purely based on the tax advantages - Australia has a corporate tax rate of 30% compared to the Irish rate of 12.5%. He says the firm maintains that the move here has nothing to do with the asbestos compensation fund and that it remains committed to it. The move is expected to cost the firm up to $50m.
***
HOPES REMAIN FOR SETANTA'S IRISH OPERATIONS - The fate of Setanta has preoccupied fans of the station for some weeks now and yesterday the UK business finally went bust. Setanta's UK business went into administration after the company failed to make scheduled payments to the English and Scottish Premier Leagues. But at home, the separate and profitable Irish operation continues as a going concern.
Ciaran Hancock, of the Irish Times, says that Setanta Sports Ireland remains on air. He says that some expressions of interest were lodged with Deloitte yesterday and over the next few days the accounting firm and the various parties will meet to see if a rescue package can be agreed. Concert promoter Dermot Desmond, who already owns 20% of Setanta Ireland, has said he is interested in making a bid for the business. Liberty Global, the US owner of NTL Chorus here, also indicated an interest in possibly acquiring Setanta's Irish business. Liberty Global is already a shareholder in City Channel, which was set up by David Harvey some years ago. They also carry Setanta Sports as part of their overall television package, and find it quite popular with subscribers.
***
MORNING BRIEFS - On the currency markets, the euro is worth $1.4075 cents and 85.5 pence sterling.
