Morning business news - February 19Tuesday 19 February 2013 12.29
LATEST PHASE OF CONSTRUCTION AT ST JAMES' GATE FOR DIAGEO - If you were driving along the coast through Dun Laoghaire yesterday - or out in Dublin Bay - you may have caught a glimpse of some very large, very shiny containers on a ship. The first shipment of these massive containers arrived at the weekend, and several ships carrying 27 85-foot-long containers are expected over the next few days. They each weigh 28 tonnes, and they are part of the €153m expansion at St James' Gate Guinness Brewery in Dublin's city centre. This delivery went to Dun Laoghaire, because of low bridges between Dublin Port and James' Gate.
Paul Armstrong, Diageo's Europe beer boss, says that each of the tanks will contain one million pints of Guinness. On a weekly basis the new tanks will make about 40 million pints of Guinness, and other beers. Over a year this will equate to about a billion pints of the black stuff. Mr Armstrong points out that 70% of the Guinness made in St James' Gate is exported to 150 countries worldwide and when the investment is complete all of the company's beer - including Smithwicks, Harp and Kilkenny, will be brewed at the Dublin plant.
Diageo is very proud of its contribution to the country's successful export market, Mr Armstrong says, adding that the company exports about €1 billion worth of product. He says the company is also a big contributor to the farming industry here by buying huge quantities of barley for the beer and milk for Bailey's Irish Cream. He says that while the €153m investment at St James' Gate will not generate any more jobs, it will secure those jobs at the company which has been operating in Dublin for the past 250 years.
MORNING BRIEFS - AIB is easing the terms on 2,000 mortgages a month. According to an interview by Bloomberg News with the bank's chief executive the bank is tackling arrears mostly by splitting mortgages, or taking off a portion of a loan that has repayments put on hold until a borrower's circumstances improve. AIB is the country's second biggest bank by assets, and has received €21 billion in State support. David Duffy said the bank stepped up mortgage restructuring from an original target of 1,500 a month, and is also beginning to write off irrecoverable debts. He also predicted that AIB and other banks in Ireland will turn more to repossessions, saying every case is not solvable. The emphasis will first be on buy-to-let properties. Mr Duffy said AIB doesn't see a need to raise extra capital and has started talks with potential equity investors, and will "engage materially" with them next year.
*** The horsemeat scandal has now caught up with the worlds biggest food company - Nestle - which has removed beef pasta meals from sale in Italy and Spain after finding traces of horse DNA. Nielsen, the consumer research group, said sales of frozen burgers in the week to February 2 fell 40%, and more than two-thirds of British adults said they would be less likely to buy frozen meat products in the future.
*** Online retailer Amazon has fired a security company whose guards are alleged to have intimidated immigrant temporary workers. A documentary on German television that aired at the weekend has also sparked an investigation into the subcontractor that brought workers from across Europe for the jobs. In a statement, Amazon said it had ceased its co-operation with the "criticised" security service with immediate effect. It said Amazon has zero tolerance for discrimination and intimidation, and expects the same of all companies that it works with. The German Labour Minister has ordered an investigation into the subcontractor that brought people from across Europe to work in Amazon's logistics centre in Bad Hersfeld. Amazon itself is not a subject of the investigation that is to be completed by the end of this week.