A subsidiary of an international financial services company, based in Limerick, has announced that it will relocate to Spain on March 31st. This is because of a lack of infrastructural supports and the absence of suitably qualified staff in the area.
Shannon Development said yesterday it was surprised and disappointed at the decision of Lochlann Research (Europe), a subsidiary of the Finnish company, ESH Suomi Yhtyma, to abandon its five-year plan to centralise the parent company's European operations.
ESH Sumoi cited a lack of suitable office accommodation, difficulty in recruiting "key multilingual personnel locally" and an inadequate service at Shannon Airport.
"There are virtually no direct flights from Shannon Airport to European cities, other than UK destinations," Mr Terho-Matti Hannukkala, ESH Suomi Yhtyma's director of overseas operations, said.
But Mr John King, Shannon Development's communications manager, said accommodation was available at the National Technological Park in Limerick and the company had withdrawn from negotiations to move into other office space before Christmas. Shannon Development had not extended any funding because it had not received a business development plan.
Lochlann Research, acquired by ESH Sumoi last May, has been in Limerick for more than a year in a minor capacity. It currently employs six people in multinational investment tracking, and mergers and acquisitions research.
It will now be relocated from the National Technological Park in Limerick to Madrid, and is expected to employ up to 100 at the end of the centralisation process. The parent company's European operations are located in Stockholm, Helsinki, Frankfurt, Nice, Brussels, Madrid and Limerick.
Mr Hannukkala said it was impossible to get more office accommodation in the Plassey industrial park. Lochlann needed up to 10,000 sq ft on a phased basis over five years but was operating from a 550 sq ft building.
Long-term lease agreements of 20 or 25 years were also interfering with the flexibility the company needed to expand.
"In Scandinavia, one never hears of a lease contract. You take an office building for a 12-year minimum period. But it is negotiable at the end of 12 months," he said.
Mr King of Shannon Development denied there was a problem with long-term leases. "There are long-term leases, there are short-term leases. They were talking all the time of getting a project together and getting a business plan together." Mr Hannukkala added that it was difficult to recruit equity analysts and mergers and acquisitions advisers with continental language skills. "English is important, but not very important," Mr Hannukkala said. Even in Dublin, suitably qualified personnel with French, German, Spanish "and to a less extent, Italian" were unavailable, while European personnel were unwilling to relocate in Ireland.
"Of course, we just did not have the kind of infrastructure to bring them to. It is Catch 22 really," he said.
Divisions of ESH Suomi which had been due to locate in Limerick included its mergers and acquisitions facilitation and advisory service, management buyout support, the national economy rating unit and the pan-European investment analysis unit. ESH Suomi is a private company based in Oravais, Finland, with a $75 million turnover (#65 million). Last year it acquired Lochlann Research as part of its take-over of LR Suomi, a Finnish financial company.
