Celtic Tiger starting to Prowl?

[DrinkingHarp]

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Ireland's business and political elite will gather this week on a greenfield site near the town of Naas, not far from Dublin, to mark the opening of one of the biggest investments made by an Irish company in several years.
There, food manufacturer Kerry Group will launch a €100m global technology and innovation centre for its ingredients and flavours business, which has grown rapidly to become one of the world's biggest.

Kerry's investment was announced in 2012, when Ireland was still in the depths of its worst recession. Four years earlier, the global financial crisis burst the country's speculative property bubble — leading to the collapse of most of the Irish banking sector, and years of austerity and corporate downsizing.
Now, though, the completion of the project represents something very different: the re-emergence of a newly confident Irish corporate sector on the back of Ireland's economic recovery. It is resulting in levels of activity not seen since the boom days of the "Celtic Tiger" economy.
This new optimism is evident in the number of companies hiring again — unemployment has dropped from 15 per cent at the worst point of the slump to 9.5 per cent now. It is also reflected in a resurgence of mergers and acquisitions, driven by both Irish companies and an increase in foreign investment.
For investors, this holds out the prospect of improving financial and share price performance — driven partly by a weak euro — but also an increased commitment to long-term plans.
"Ireland is a much more pleasant place to be doing business in now than for the past few years," says Gene Murtagh, chief executive of Kingspan, a maker of insulating products based in the town of Kingscourt in county Cavan. "The mood has shifted — there is a belief that the country is crawling back to a sustainable path again."
This change in sentiment is becoming more widely shared. Last year, Ireland was the eurozone's fastest-growing member state. Economic growth forecasts for this year range between 4 and 6 per cent.
But, even as recently as a few months ago, the recovery was not clearly visible. When International Airlines Group swooped for Aer Lingus at the end of last year, it appeared to confirm that Irish companies were fated to be the targets of foreign companies.
Market recovery

That has not been the case. So far this year, three of Ireland's biggest companies have made substantial acquisitions abroad, including CRH's high-profile €6.5bn purchase of assets being sold by cement groups Holcim and Lafarge as part of their merger.
Irish companies are also making noticeably more optimistic forecasts for future trading as consumers finally start to respond to the improving economy.
"There is a consumer-led recovery under way and things are better than they have been for years," says Liam FitzGerald, outgoing chief executive of UDG Healthcare, the Dublin-based health services group that last week sold its Irish drug distribution businesses to US pharma group McKesson for €407.5m.
Mr FitzGerald says UDG intends to use the net proceeds of €277.5m to realise ambitious growth plans, including "the pursuit of further strategic M&A opportunities".
A weaker euro has played its part — helping Irish companies to boost their exports to two key markets: the UK and the US. Finance minister Michael Noonan recently said that exports grew by 13.6 per cent in the second quarter, helped by multinationals and Irish-owned companies.
Another important consequence of the economic recovery has been the improved fortunes of Ireland's banks.
Ireland is a much more pleasant place to be doing business in now than for the past few years. The mood has shifted — there is a belief that the country is crawling back to a sustainable path again
- Gene Murtagh, chief executive of Irish company Kingspan
In March, Allied Irish Bank reported its first annual profit since the banking collapse, swinging from a loss of €1.7bn in 2013 to a pre-tax profit of €1.1bn for 2014. Although mortgage arrears still plague their balance sheets, Ireland's banks are reporting stronger net interest margins and more buoyant corporate lending.
Not all sectors have benefited from the recovery. Ireland's construction industry, the most severely damaged by the crisis, is still struggling. Two months ago, housebuilder Abbey reported only "slow but steady progress" at its Irish operations in the year to April. While building activity is picking up, it is uneven, with sharp swings from quarter to quarter as the unwinding of the property crash — the most toxic legacy of the Irish crisis — continues.
Nevertheless, it has not deterred chief executives in other sectors from pursuing investments. Ashley Gardiner, the co-founder of a distillery in the picturesque setting of Powerscourt Estate, a Palladian mansion in county Wicklow, believes now is the right time for the launch of his €10m venture. He is hoping to tap into a surge of interest in one of Ireland's most famous products and sounds confident: "There is confidence in Irish whiskey and in Ireland Inc generally."

[armaghniac]