Noel Treacy (Galway East, Fianna Fail)

I thank the Deputy for raising this matter on the Adjournment. On Thursday 11 November 2004, Nestle announced its intention to close its chocolate crumb production facility at Mallow, County Cork. The facility is based at the Dairygold plant in Mallow and employs 57 people. Nestle stated a strategic review of its business requirements for chocolate crumb identified that, due to improvements in production methods and the loss of the chocolate crumb contract for the Canadian market, these requirements could best be met at its facility in Scotland. Nestle also stated the closure of the Mallow facility is to take place by March 2005.

Dairygold does not accept that Nestle is entitled to implement such a decision and the co-operative has instructed its legal advisers to take immediate legal action against Nestle regarding the enforcement of Nestle's agreements with Dairygold. Pending the outcome of High Court injunction proceedings, Dairygold has indicated it will make no further public statements in the matter.

I assure the Deputy that Mallow is a location of focus for the Industrial Development Agency. The IDA is marketing Mallow as a location for foreign direct investment through its network of overseas offices, in particular the availability of a 6.27 hectare fully serviced site and an advance factory of 2,072 square metres. The relatively recent arrival of Kostal to Mallow has been a significant asset to the economic development of Mallow and north Cork. More than 400 people are employed at the Mallow operation. Mallow is designated as a hub town under the national spatial strategy, which will lead to significant development in the medium to long term, and this has the potential to benefit the north Cork area.

From an inward investment perspective, Mallow, due to its proximity to Cork city, also stands to benefit from the continued development in the Cork area where over the past ten years direct employment in IDA supported companies in Cork city and county has increased from 10,345 in 1993 to 18,162 in 2003. With 134 IDA supported companies in County Cork, the sectors contributing to this growth are ICT, pharmaceuticals-health care and international services. This growth is expected to continue into the future with IDA in 2003 announcing 11 new projects for Cork with the potential to create up to 800 new jobs.

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