Ulster peace sets investor pulses racing

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The Independent Online
A SURGE of interest in Northern Ireland has been set off by the peace process, with more than 150 companies - including industrial heavyweights such as Nissan, Daewoo, Du Pont, Nokia and Bell Helicopters - signing up for a conference this week on direct foreign investment in the province.

The conference, sponsored by the Prime Minister, John Major, and featuring an appearance by the US Secretary for Commerce, Ron Brown, comes after decades when many overseas companies avoided investing in Ulster and sometimes pulled out altogether.

The region's natural advantages - a well-educated work force, low property prices, wages 10 per cent lower than elsewhere in the UK and good communication links - combined with generous government grants that underwrite up to 50 per cent of foreign companies' capital investment, were often outweighed by terrorist considerations. "In every interview we ever had with a foreign company, the subject of security always came up,'' said Frank Hewitt, the deputy chief executive of the Industrial Development Board.

Overseas companies often cited the potential danger to executives and their families, although there have been few cases of foreign businessmen being caught in the fighting. The notable exception was the kidnapping and shooting of Thomas Niedermeyer, managing director of the Grundig plant. "Instability in a political situation does hinder foreign investment,'' said Suematsu Kondo, the managing director of Kawasaki Heavy Industries (UK). Although Kawasaki has sent technical advisers to other companies in Northern Ireland, it has no operations of its own there. Mr Kondo stressed that the company had no immediate plans to invest.

Businesses such as Kawasaki, with no previous direct involvement in Ulster, have an added incentive to go there now - government largesse. The European Union has promised up to £150m in extra money for economic development, and the US Congress is considering a package of investment guarantees.

Companies like Ford, that have stuck it out, are also enthusiastic about the peace initiative. "We're encouraged about future prospects in Ireland," said Jim Trainor, a Ford spokesman. The company, which has a fuel pump plant in the province, is sending Ian McAllister, managing director of Ford of Britain, to the conference.

Smaller firms are hoping to cash in, too. Michael Hartnett, chief executive of Tillyard, a Canadian property developer, has been trying to persuade North American companies to set up in the province - in buildings custom-designed by his company to transatlantic standards. "Without the peace process, it was an uphill battle," he said. "Now the people in Kansas will listen to you." Non-industrial companies such as Tesco, which has stores in all parts of the UK except Northern Ireland, and the US securities house Goldman Sachs, are sending delegates as well.

But the benefits of peace will not be evenly spread across all business sectors. While tourism is expected to boom, companies that have gained from the huge British security presence are likely to see their revenues start to dry up. The Government has already announced a three-year cut of £180m in security spending, some of which will be used to attract new business Any increase in employment due to new investment will have to make up for the estimated 20,000 security jobs that will be lost. The Confederation of British Industry Northern Ireland estimates the net gain in jobs over the next five years will be just 29,000.

That is a large improvement on Ulster's economic performance since the troubles began. An estimated 40,000 to 60,000 jobs were lost between 1973 and 1990, as the number of foreign-owned plants fell by 41 per cent. In contrast, employment by overseas companies grew steadily in the Republic, overtaking the North in the mid-1980s.

But Ulster's situation has improved, with the Industrial Development Board reporting record inward investment of £259m in 1993/94, creating 2,300 jobs. "There will never be a better time to invest in Northern Ireland than right now,'' Mr Hewitt said.