Ireland on horizon for James Hardie

JAMES HARDIE INDUSTRIES is preparing a possible shift of its corporate headquarters from the Netherlands to Ireland, dampening expectations the fibre cement maker could seek to redomicile to the US, where the bulk of its operations are.

The company declined to comment on a report in the newspaper the Irish Independent yesterday that it was looking to relocate its tax base to Ireland in an effort to exploit the country's low 12.5 per cent corporate tax rate. "James Hardie has been reviewing its domicile for some time, and that review is incomplete," said a company spokesman, Sean O'Sullivan.

He declined to offer an explanation for why two companies were registered with the Irish Companies Registration Office last week under the Hardie name.

Last night the company said it was "not in a position at this stage to announce the outcome of the review".

The company's chief executive, Louis Gries, has made no secret of his frustration of the company being based in the Netherlands.

Aside from Hardie paying a far higher tax rate than it originally expected, a new tax treaty between the Netherlands and the US has created headaches. For one, Mr Gries and other senior Hardie executives are now required to be Dutch residents. However, the company did win a recent $US49 million tax dispute with the US Internal Revenue Service over money transferred from the US to the Netherlands.

In February Mr Gries said: "Our situation is way more complex than it should be. The company has its corporate headquarters in the Netherlands and its operational headquarters in California. It makes it difficult to run a business that is primarily in the US and the rest of it in the Asia-Pacific."

However, it is unclear how a move to Ireland would make things any less complex for the company, the bulk of whose shareholders are in Australia.

The company has cited Ireland as a possible location for a redomicile for years. At the shareholder meeting called to approve the shift to the Netherlands in 2001 the then chairman, Alan McGregor, mentioned Ireland as a possible "fallback".

However, a move to Ireland could still come under stiff questioning from shareholders and analysts. "It's still not a natural place for them to be, in my opinion," said a UBS analyst, David Leitch, questioning the logic of having a corporate base in a country where you have no operations. "I personally believe the US is the natural place to be."