I thank the Chairman for the opportunity of speaking on the annual report of IDA Ireland. The annual report sets out a summary of the performance of the organisation in 2002 and some of the work we are doing to lay the basis for future success. There are now 133,000 people employed in overseas companies in Ireland. In 2002 we agreed 55 new investment projects, of which 31 were new green field investments and 24 expansions of existing activities. Taking the year as a whole, around 11,700 new jobs were gained in overseas companies but 14,700 were lost. This reflected the difficult global trading conditions and the continued transformation under way in overseas companies here.
Some particular successes during the year were in the pharmaceutical and health care sector. We note decisions by Abbott to expand its activities and set up a new centre for cardiac and vascular stents in Galway, while Medtronic is also strongly expanding its cardiac and vascular business in Galway. Amersham Health is expanding in Cork, Takeda has established its first bulk Japanese pharmaceutical plant outside of Japan in Grangecastle in Dublin and Servier is expanding its pharmaceutical business in Arklow.
The success of last year is continuing this year. Altana, the German pharmaceutical company, is establishing a new base in Cork, as is Recordati from Italy. Taro Pharmaceutical is locating in Roscrea, Inamed is expanding its facility in Arklow while Harmac is located in Castlerea and Gerard Laboratories is located in Baldoyle in Dublin. These are all excellent examples of pharmaceutical and health care companies which have been growing successfully in the past year or two.
We also had a good year in international services. The annual report contains a section about the growth of MBNA in Carrick-on-Shannon which, with 750 employees, has provided a boon to the town. Churchill Insurance is expanding strongly in Galway and GMAC is developing in Mullingar. This year the trend is continuing with Schlumberger and Trend Micro expanding in Cork, SAP establishing a new centre in Galway and Google, Overture and Accenture, leading global names in their businesses, expanding in Dublin.
The changes in business are also reflected in the extent of new research and development investments coming to Ireland, some of which are mentioned in the annual report. Motorola in Cork has established a new centre for even more advanced research in wireless. RF Integration is in the same business. Dow Corning is carrying out serious research in plasma coatings and Bausch and Lomb, which employs 1,500 to 1,600 people in Waterford, has introduced a new, significant research centre to develop a product which will be planted at the back of the eye and release drugs over time. It is a breakthrough to have a centre of such quality in Waterford. It will be important to underpin existing activities in Waterford.
Also during the year, the Intel Fab 24 investment resumed in Leixlip. By this time next year, the company will have invested more than $5 billion in the town and just last week it announced the establishment of a new IT innovation centre there. The Wyeth pharmaceutical investment, the largest bio-pharmaceutical campus in the world, is proceeding in Grangecastle and gives the IDA hope that we can win further investments of this size and quality in the coming period. The provision of world class business and technology parks referred to in the report has been continuing in practically every key town. It is important in this context that we offer something to investors.
This is a tough time for many companies. International markets are tough and there are many cost pressures, both globally and in Ireland. As a result, we are seeing significant job losses, some in the past week, which can be difficult and painful in local areas. Internationally there are also fewer foreign direct investment flows generally.
Ireland's competitive advantages have changed forever. We do not have a labour surplus nor do want one to re-establish. The 15% unemployment rate of ten years ago, while a major problem, was also an opportunity. We can no longer claim to be a low cost location. Many other locations offer skills at lower costs. In the future, we must focus much more on the quality of the high skills we offer, the flexibility, speed and agility we show in meeting business needs and the competitive tax advantage we possess and must retain. Quality rather than quantity must be the guiding principle and already drive much of what we are trying to do.
Despite the tough environment, we are still winning high value investments. Since September 2002, about 40 investments have been announced, roughly equivalent to one investment per week. These have been of varying size and in different locations. To win more of them, we have to work well together at national level to create new competitive advantages in skills, knowledge, innovation and research. This is the reason the money being invested in Science Foundation Ireland and other research and colleges as well as improvements in both physical infrastructure and business supports, the less tangible types of infrastructure, are so important. It was this type of investment, particularly in telecommunications, which won us the Google investment in recent months when the company decided to use Ireland, in preference to Switzerland, as its base for perhaps one-third of its global searches on the Internet. This was a significant win because we were competing against quality. We won because of our investment in telecoms and our other advantages in skills and taxation. We also need to maintain flexibility and cost competitiveness.
The implementation of the national spatial strategy and national development plan will be critical to regional development and winning investment into regions. We need to push ahead and deliver on these to improve the chances for regions to win investments, particularly those of higher values which are more difficult to win. They look for a good base of business support services. They want easy and quick access. They want cost competitive services. In general, higher value investments tend to go to urban areas so the national spatial strategy must give us strong urban centres in each region in order for regions to win.
Very briefly on the accounts in the annual report, the main items of income were Oireachtas grants of €125 million in 2002, grant refunds of €42 million and profit on sale of assets of €20 million. On the expenditure side we paid grants of €118 million, promotion and administrative charges were €43 million and depreciation charges and provisions were €35 million, leaving an overall small operating deficit of €3 million.
In the IDA we have 295 staff, about 150 of whom are in Dublin, with 100 in various locations around the country. That 100 is a doubling from the 50 we had in regions two years ago. We have 45 staff overseas, mainly in the US and Europe, with a few in Asia-Pacific. For all of us the challenge is to move now to greater success by renewing existing investments and constantly working with existing managers in the overseas companies in Ireland and replacing what is lost. We will have further losses unfortunately, and that involves working strongly with local and regional interests to improve the offering for locations that have been losing out.
We have to win new quality investments and find new advantages in new areas. That is the everyday work of the IDA and it is work we feel privileged to be involved in given its potential benefit to the country and to regions.