Cremation going to be a boom business - as entrepreneur targets annual turnover of €1m
The first crematorium financed by a business expansion scheme is due to open later this month in Shannon, Co Clare.
With a nationwide advertising campaign across radio and print due to begin this week, the Co Clare-based crematorium business is targeting an annual turnover of €1m within three years, with sales of urns adding €150,000 to the firm's bottom line.
Built by entrepreneur Jim Cranwell and his family, the crematorium has spent a total of €2.4m on the new facility at a 1.3-acre site beside Illaunamanagh Cemetery in Shannon.
Half the money came from the Employment Incentive and Investment Scheme (EIIS), an investment scheme which provides for tax relief of up to 40pc for backers of qualifying businesses.
Dutch company DFW Europe BV has installed a €490,000 cremator at the Shannon Crematorium that has the capacity for eight cremations a day, said Mr Cranwell.
"Which leaves a lot of capacity in coming years as the business grows."
Cranwell believes Co Clare is an ideal location for his new business as there is "no existing competitor in the immediate catchment area which is conservatively assumed to be Clare, Limerick, Galway, North Tipperary and north Kerry".
The entrepreneur believes that with graveyard space at a premium and the rising cost of traditional burial, cremation is going to be a boom business in Ireland.
"The average cost of a basic Irish funeral is around €5,000, whereas a cremation costs €700 to €800," he said. "It can be quite expensive to buy a grave plot and the prices vary dramatically around the country.
"There is also the additional cost of digging and covering the grave which can range from €600 to €1,000.
"You must also factor in the requirement to tend to the grave thereafter."
The Shannon Crematorium investment offers higher-rate taxpayers an opportunity to shelter a portion of their taxable income using EIIS relief.
Investors can put in up to €150,000 and the crematorium scheme is offering a return on investment of about 9pc per annum (before Capital Gains Tax) for individual investors, including the income tax saved on the net initial investment.
Recent trends in relation to funerals in Irish society have seen a move away from more traditional burials increasingly towards cremations, said Mr Cranwell.
Ireland's cremation rate is 16.9pc - up from 12pc in 2010. But the market is still underdeveloped, said Mr Cranwell, who points to Japan - where the cremation rate is 99pc - and the UK, where the rate is 73pc, as leaders internationally.
"We have identified the target market and projected turnover based on the population of the surrounding area, the national death rate and the available statistics in relation to the utilisation of cremation services in Ireland to date," said Mr Cranwell.
As many as 170 local undertakers in the Co Clare region have been invited to the official opening on May 28.