Exporters call for Minister Brian Cowan to Commit More Funding To Drive The Production Sector, In The 2007 Budget.

There is mounting evidence, stated the Irish Exporters Association (IEA) of increasing difficulty for small and medium sized exporters to raise the equity finance they require to enable them to grow to the critical size needed, in order to successfully expand into international markets.

The future of the productive sector of the economy depends on a vibrant flow of new companies entering new export markets with new products. The Irish Exporters Association again requests the Minister for Finance, Brian Cowan T.D, to not only review, but to update the Business Expansion Scheme (BES) and the Seed Capital Scheme (SCS) to levels that will stimulate fresh investment interest in companies that wish to expand into international markets.

John Whelan, CEO of the Irish Exporters Association, stated that “it is essential for the future expansion of the indigenous export sector, that the Minister in his budget tomorrow, both reviews the lifetime of the BES and SCS schemes for a further 3 years, and updates the scheme to reflect today’s market”.

He went on to say that: “The BES scheme has not been indexed to inflation, from its inception in 1984. Hence, we are now calling on the Minister to increase the investment ceiling from its current level of €31,750, which, using indexation, will take it to €100,000, or €300,000 over a 3 year period.

“Also”, he said, “there is strong evidence that a major gap has arisen between the point at which Venture Capital companies enter the market, to manage equity investment schemes, and the current BES thresholds for these companies. This has resulted in a turn away from facilitating companies looking for BES funding”.

“Hence”, he said, “the Minister needs to increase the threshold for company fund raising, under the BES scheme from €1m to €5m”.

The IEA believes that the timing of a revamped BES scheme this year is particularly appropriate as investors look for potential avenues of investment, other than property.

The IEA also states that the legislation needs to be updated for the changes in business practices that have taken place since its establishment 22 years ago. There are currently many restrictions, in the legislation, in relation to carrying out manufacturing operations. The scheme needs to be available to services export companies also. In addition, group restrictions currently in the legislation no longer make sense.

ENDS

For further information contact: Mr. John Whelan, Chief Executive, IEA

Tel: 01-661 2182

Mobile: 087 927 1243