Employment in the International Shipping Services sector in Ireland grew by 10% last year according to recent analysis published by the Irish Maritime Development Office (IMDO). The information is based on companies that have elected to join the dedicated Irish Tonnage Tax scheme, a measure introduced in the 2002 Finance Act to help secure the future of the Irish shipping sector.
In 2010 five new companies elected to join the scheme contributing to the overall increase of 44% in the number of vessels covered by Tonnage Tax. Direct employment has risen from 314 to 346 people at these companies as a result of this initiative.
Commenting on the data, IMDO Director Glenn Murphy said “The results are a positive indication that, after long periods of decline for the industry, policy support measures have encouraged investment which has led to growth and new employment. We are optimistic that direct employment in the high value professional shipping services sector could double over the next five years leading to further investment and job creation opportunities.”
The majority of Irish based ship-owning firms operating within the Irish Tonnage Tax scheme are not dependant solely on the Irish economy for their core day-to-day revenue streams but are instead employed in the international shipping markets. The global shipping business had total charter trading transactions in 2010 estimated at $450 billion dollars. Shipping markets generally continued to be quite volatile last year with most sectors still recovering from large charter earnings declines over the previous 12 months. Overall Irish firms were quite resilient in their ability to compete last year.
The growth in this sector in Ireland has been driven both by established Irish shipping companies such as Arklow Shipping and the Mainport Group, by inward investment by foreign groups such as D’Amico and in 2010 by Ardmore Shipping a new inward investment company headquartered in Cork and backed by a large US private equity firm. Since the beginning of 2011 several firms have already announced further fleet expansion and investment programs with other new candidates expected to join the scheme this year.
The report highlights ;
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10% increase in direct employment in shore-based international service positions in Irish tonnage tax (ITT) companies increased from 314 people in 2009 to 346 in 2010. Typically in specialised areas such Finance/Technical Management/Operations and Chartering.
- Number of companies in Irish tonnage tax increased from 29 in 2009 to 45 in 2010
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A 44% increase from 154 vessels to 277 vessels owned, operated or managed by Irish tonnage tax companies.
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Half of the vessels within ITT are less than five years old with the total average age at eight years.
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An estimated investment by Irish companies in new and second hand vessel acquisitions in excess of €300million.
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Strong indirect benefits to other International services such as maritime law, accounting and ship finance sectors in Ireland leading to further job growth.
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New cadet training programs initiated by new entrants.
ENDS
For further information, please contact:
Dr. John Joyce – Communications Manager, Marine Institute.
Phone: +353 (0) 87 2250871
john.joyce@marine.ie
Notes to Editor
Irish Tonnage Tax.
The Irish Tonnage Tax was introduced in the 2002 Finance Act to help secure the future of the Irish Shipping Sector. The tonnage tax regime is part of the normal corporation tax regime in Ireland except that normal operating profits are calculated based on the net registered tonnage of the vessel rather than notional profits at which stage the standard rate of corporation tax is then applied.
Ireland is one of 22 European Member states to have introduced a tonnage tax regime. All tonnage tax regimes including Irelands have been approved in line European Commissions “State Aid Guidelines to Maritime Transport. The European Commission advocates and encourages member states to introduce these measures.
The Irish Maritime Development Office
The Irish Maritime Development Office (IMDO) is the agency charged with the responsibility for undertaking the following activities through its statutory remit include :
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To promote and assist the development of Irish shipping and Irish shipping services
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To liaise with, support and market the shipping and shipping services sector
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To advise the Minister on the development and co-ordination of policy in the shipping and shipping services sector so as to protect and create employment
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To carry out policy as may be specified by the Minister relating to the shipping and shipping services sector and seafarer training
The IMDO operates under the auspices of the Department of Transport, Tourism and Sport.