Work has begun on a new crematorium in Co Clare which is raising €1.2m from a business expansion scheme and is projecting revenues of €1m by 2020.
Entrepreneur Jim Cranwell and his family are spending a total of €2.4m on the new facility at a 1.3-acre site beside Illaunamanagh Cemetery in Shannon, with half the money coming from the Employment Incentive and Investment Scheme (EIIS).
Dutch company DFW Europe BV has been engaged to supply and install a €490,000 cremator at Shannon Crematorium that can "do eight cremations a day, which leaves a lot of capacity in coming years as the business grows", states an investment prospectus.
Cranwell believes 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 circa €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 investment offers higher-rate taxpayers an opportunity to shelter a portion of their taxable income using EIIS relief. Investors can invest 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 Cranwell.
Ireland's cremation rate is 16.9pc - up from 12pc in 2010. But the market is still underdeveloped, said Cranwell, who points to Japan - where the cremation rate is 99pc - and the UK - where the rate is 73pc - as leaders in the international sector.
By 2020, Shannon Crematorium expects to be hitting a turnover of €1m, with sales of urns adding €150,000 to the firm's bottom line.
"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 Cranwell.
Sunday Indo Business