SHANNON FOYNES PORT COMPANY ECONOMIC IMPACT ASSESSMENT Economic Impact Assessment – Shannon Foynes Port Company
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SHANNON FOYNES PORT COMPANY ECONOMIC IMPACT ASSESSMENT Economic Impact Assessment – Shannon Foynes Port Company SHANNON FOYNES PORT COMPANY ECONOMIC IMPACT ASSESSMENT AUGUST 2016 1 Economic Impact Assessment – Shannon Foynes Port Company Table of Contents List of Tables Executive Summary 4 Section One Introduction & Methodology 12 1.0 Introduction & methodology 13 1.1 Port supported maritime and other logistics 13 1.2 Survey of direct impacts 14 1.3 Study timeframe 14 1.4 Secondary research 15 1.5 Economic impact 15 Section Two Overview 16 2.0 Overview 17 2.1 Policy framework 18 2.2 A growth environment 20 2.3 National port summary 24 Section Three Economic Impact Assessment 26 3.0 Introduction 27 3.1 Economic impact of Shannon Foynes Port Company 27 3.2 Shannon Foynes Port Company & Service Providers 28 3.3 Shannon Foynes Port Company Port Users 30 3.4 Shannon Foynes Port – Overall Economic Impact 32 3.5 Capital Expenditure 36 Section Four Conclusions 39 2 Economic Impact Assessment – Shannon Foynes Port Company LIST OF TABLES Table Title Page Table 1 Volume of European Ports with depths in excess of 10 metres 20 Table 2 Shipping, Cargo & Tonnage Growth 2008-2014 21 Table 3 Shipping, Cargo & Tonnage Percentage Change 2008-2014 22 Table 4 Tonnage of Dry bulk, Liquid bulk and Break bulk through SFPC in 2014 22 Table 5 World Seaborne Trade Average Growth % – Dry Bulk 23 Table 6 Volume of Trade through all Ports (Ireland) 2009-2014 24 Table 7 Tonnage of Dry bulk, Liquid bulk and Break bulk through major ports (Ireland) in 25 2014 Table 8 Economic Impact of Shannon Foynes Port Company - Operating Expenditures 27 (2014) Table 9 Economic Impact of Shannon Foynes Port Company 2014 Operations 27 Table 10 Economic Impact of Shannon Foynes Port Company & Service Providers 28 Operational Expenditure Table 11 Economic Impact of Shannon Foynes Port Company & Service Providers (2014) 29 Table 12 Economic Impact of Shannon Foynes Port Customers Operational Expenditure 30 (2014) Table 13 Economic Impact of Shannon Foynes Port Customers 31 Table 14 Economic Impact of Shannon Foynes Port Company – Operating Expenditures 32 (2014) Table 15 Value of Trade through SFPC (Ports) 32 Table 16 Economic Impact of Shannon Foynes Port Company 33 Table 17 Employment Impact of SFPC on Regional Economy – 2014 Payroll Impact 34 Table 18 Regional spend resulting from Shannon Foynes Trade Activity 34 Table 19 Impact of regional spend by SFPC & Port Companies – 2014 34 Table 20 Transport & Logistics Expenditure & Employment supported directly by 35 Shannon Foynes Port Activity Table 21 SFPC Traffic by Vessel Size 35 Table 22 Past Capital Expenditure and projected Capital Expenditure among companies 36 reliant on Shannon Foynes Port Table 23 Projected Long Term Capital Expenditure – Masterplan and Port Activity 37 Table 24 Potential Impact of Attracting Major New Industry Based on Improved Regional 40 Connectivity Table 25 Potential Impact of Developing New Industry Cluster Based on Improved 41 Regional Connectivity 3 Economic Impact Assessment – Shannon Foynes Port Company EXECUTIVE SUMMARY 4 Economic Impact Assessment – Shannon Foynes Port Company Shannon Foynes Port Company (SFPC) is Ireland’s second largest port operation currently handling in excess of 10 million tonnes per annum. The company has statutory jurisdiction over all marine activities and port management on the Shannon Estuary covering 500km2 of navigable water from Kerry and Loop Head in Clare to Limerick City. The estuary is Ireland’s main deepwater facility with a channel depth of in excess of 16 meters and a handling capacity for large vessels up to 200,000 deadweight tonnes (dwt). The port is designated as a Core Network Port (TEN-T) by the European Union and a Tier 1 Port in the National Ports Policy. Shannon Foynes Ports handled over 10.2 million tonnes of goods in 2014. It remains the largest dry bulk port in Ireland, handling 9,013,491 tonnes of dry bulk in 2014 representing 88% of the total tonnage handled by SFPC. Liquid bulk accounts for 10% of tonnage through the ports with break bulk comprising 2% of total tonnage. SFPC commissioned W2 Consulting to conduct an independent economic impact assessment examining the activities of the Port Company and wider impact of the commercial trading activity of the port. A programme of primary research was undertaken to generate the source data employed in the development of the economic impact study for SFPC and its associated businesses1. A total of 31 companies who currently use Shannon Foynes ports for import / export business and port service providers were included in the research sample. The response rate represented 94% of SFPC customers and service providers who supplied the requested data for analysis in the compilation of the economic impact data. The terms of reference for the assessment focused the analysis of the following; Economic impact of SFPC operations; Overall impact of SFPC and service providers; Economic impact of entities reliant on port facilities for commercial activities; Total impact of all commercial activity generated by SFPC and associated facilities; Trade handled by the Port; Estimation of overall economic impacts to include output, employment, expenditure, GVA, value of trade using direct and multiplier impacts to calculate economy wide impacts. Economic Impact Headlines The economic impact of all SFPC port related activity was €1.9 billion in 2014. A total of 3,648 FTE’s are supported generating €192.7 million in employment income among companies engaged with SFPC. The regional economic impact of SFPC and associated service providers is €95.8 million, The trade activity of SFPC and service providers supports 534 FTEs annually. The value of trade handled through SFPC for 2014 was €7.6 billion SFPC operations is responsible for 65 FTE’s in addition to an employment income effect of €9.4 million for the regional economy. The commercial activity of customers of SFPC resulted in €347.2 million of expenditure in the regional economy on non labour goods and services. Projected capital expenditure over the course of Vision 2041 is calculated at €1.8 billion that will support over 22,000 FTE’s in the region and stimulate a further €1.09 billion between indirect and induced expenditure. 1 All companies with commercial engagement with SFPC through service provision or reliance on the ports for import / export activity. 5 Economic Impact Assessment – Shannon Foynes Port Company Value of Trade Handled through SFPC Primary research conducted among customers of SFPC examined the value per tonne handled through SFPC ports. The estimated value of trade handled through SFPC for 2014 was €7.6 billion. This is based on the value per tonne of goods traded by each respective customer of SFPC. This value also incorporates labour and non labour impacts which has the additional consequence of indirect and induced impacts resulting in additional demand for intermediate goods and employment in the various sectors SFPC customers engage with. Economic Impact of Shannon Foynes Port Company operations Analysis of 2014 Shannon Foynes Port Company operational budgets reveal a direct expenditure of €11.6 million into the regional economy. This direct economic impact is comprised of labour and non labour expenditure in relation to capital expenditure in 2014. Furthermore, a total of 35 full time equivalent employees (FTE) are directly engaged by Shannon Foynes Port Company. Based on SFPC revenues of €11.3 million and business related expenditure across the areas of employment and non labour business expenditure in addition to capital expenditure, the Gross Value Added (GVA) is €7.6 million for SFPC. In addition to the direct impacts based on the modelling of the indirect and induced multiplier impacts of these operational activities by SFPC, the economy wide impact is estimated at €15.65 million GVA. SFPC is responsible for 65 FTE’s in addition to an employment income effect of €9.4 million for the regional economy. Economic Impact of Shannon Foynes Port Company 2014 Operations (2014) Categorisation of Impact Direct Impact Multiplier Economy Wide Impacts Impacts (€ Million) Output – Revenue Revenues €11.3 €4.95 €16.2 Employment & Employment Income Employment (FTE’s) 35 30 65 Employment Incomes (€m’s) €5.0 €4.4 €9.4 Non Labour Business Expenditure Non Labour Business Expenditure €5.2 €4.4 €9.6 Gross Value Added / GDP Contribution Estimated GVA / GDP Contribution €7.6 €8.1 €15.65 Capital Expenditures Capital Expenditures – 2014 €1.3 €0.81 €2.1 Economic Impact of Shannon Foynes Port Company and service suppliers The delivery of maritime and port services is effectively a conglomerate of service providers delivering an integrated approach to shipping on the estuary. The assessment of the economic impact of direct service providers highlights the wider value generated for the area as a result of the variety of local services required to support port activity. The analysis includes a range of constituent service providers integral to the delivery of all maritime and logistical services required. These include Sea and coastal water transport, Cargo handling and stevedoring, Freight and logistics, Storage and warehousing, Specialist maritime services. 6 Economic Impact Assessment – Shannon Foynes Port Company Economic Impact of Shannon Foynes Port Company & Service Providers (2014) Categorisation of Impact Direct Impact Multiplier Economy Wide Impacts Impacts (€ Million) Output – Revenue Revenues €63.0 €90.7 €153.6 Employment & Employment Income Employment (FTE’s) 289 245 534 Employment Incomes (€m’s) €13.0 €11.6 €24.5 Non Labour Business Expenditure Non Labour Business Expenditure €35.8 €30.4 €66.2 Gross Value Added / GDP Contribution Estimated GVA / GDP Contribution €38.2 €57.6 €95.8 Capital Expenditures Capital Expenditures – 2014 €2.35 €1.4 €3.8 A total of 289 FTEs are supported as a result of all port activity resulting in an overall employment impact of 534 FTE’s.