The Irish paper, print and packaging sector comprises approximately 600 companies. It employs in the region of 18,000 people and has estimated sales of €1.6 billion per annum. However, over-capacity in the sector has resulted in rationalisation and consolidation. A number of companies have downsized and closed and further rationalisation is expected. Outsourcing is likely to continue to be an option for parts of the manufacturing process.
In June, 2002, the print industry training and development forum was established and, for the first time ever, all the participants in the paper, print and packaging industry came together to respond to a rapidly changing environment. The purpose of the forum was to represent and promote the needs of its members in order to move the industry towards international best practice. State agencies, including Enterprise Ireland, are represented on the forum. The Irish Printing Federation is a member of the forum and issues relating to levels of imports and VAT have been brought to the forum by the federation. In addition, Enterprise Ireland meets the federation on a quarterly basis.
The VAT rates on printed matter were reviewed in the 1998 Finance Act. I understand that the intention at the time was to simplify the rating structure and to extend the lower rates as much as EU obligations would allow. I am informed that under EU VAT law, with which Irish VAT law must comply, it is not possible to introduce new zero rates of VAT and we can only retain the zero rating that was in existence on 1 January 1991. However, all printed booklets are zero-rated for VAT purposes and the lower rate includes a wide range of printed matter such as newspapers, periodicals, brochures, leaflets, etc. I understand that the UK has similar zero rating provisions but for a wider range of printed matter. Overall, I would not be convinced that the VAT differential is the solution to the issue of outsourcing. The printing industry, along with other manufacturing industries, is facing competitive international pressures.
As regards the print sector generally, Enterprise Ireland's primary objective is to develop additional export sales and to establish overseas market presence. In terms of jobs, activity is focused on the creation of new jobs through supporting entrepreneurs setting up new high potential start-up companies and the retention and creation of jobs in existing companies. Research is also supported in companies and third level institutions. Enterprise Ireland will continue to focus its support on key areas that address the needs of clients in both the print and packaging sectors.
FÁS, in association with Enterprise Ireland and employers and unions within the industry, has undertaken a study of the paper and printing industry. The report, which is due to be completed by September 2004, will provide a strategic analysis of the current competitive position of the industry and will include a range of recommendations on the development of appropriate business models and skills sets for the sector.
