Brendan Smith (Cavan-Monaghan, Fianna Fail)

I am aware that Minch Malt Limited is to close its malting plant at Banagher, County Offaly, and its two intake points at Tullamore, County Offaly, and Borrisokane, County Tipperary, with effect from September 2005. There will be 19 job losses in total. I am concerned about the impact these job losses will have on families in the area, but the decision to close the Banagher malting plant by Greencore was a commercial decision taken by the company. The reason given for the closure is increased competition on export markets. Furthermore, the malting industry within the European Union is stagnating due to a fall in beer consumption.

Minch Malt Limited is part of the Greencore Malting Group, which was formed in 2000 following the integration of the three Greencore-owned malting companies of Pauls Malt in Britain, Minch Malt in Ireland and Belgomalt in Belgium. As a consequence of this integration, Greencore Malt is now the sixth largest malting group in the world. There is one other maltster in Ireland, namely, the Malting Company of Ireland, which is owned by Dairygold and Glanbia, at Togher in Cork.

Minch Malt Limited is Ireland's largest maltster with an annual capacity of 125,000 tonnes. It sources quality malting barley directly from 3,500 Irish farmers, under forward contracts, for its malting plants in Athy, County Kildare, and Banagher, County Offaly. The Banagher plant processes nearly 40,000 tonnes of barley from 300 farms. It is one third the size of the Athy plant, which employs 40. Athy is already at full capacity so it cannot take over the 40,000 tonnes from Banagher.

Farmers who are affected by the closure of Banagher may decide to produce barley for the feed barley market instead. It has been suggested that this will put pressure on grain storage in the midlands area next autumn. The Banagher, Tullamore and Borrisokane facilities will be offered for sale as going concerns and may be taken over by current players in the trade. My Department is carrying out an inventory of grain storage capacity in the Offaly and north Tipperary area. In the event that this inventory shows up a problem in storage capacity for the coming harvest, I will examine the possibility of making funds available to deal with the problem.

Ireland is a surplus producer of malt, with exports in the region of 50,000 tonnes. Minch Malt Limited has been exporting to markets in Russia, south-east Asia and South America. However, Russia has now become almost self-sufficient in malt. Moreover, there is a trade agreement between south-east Asia and Australia which excludes imports from Europe, and South America has always been a difficult market. Exports have been taking place from the output of both the Athy and Banagher plants. Greencore has decided to consolidate operations at the bigger plant, Athy, to solidify the domestic market and it invested €4.5million in this facility last year, increasing the storage capacity and installing new driers. This investment demonstrates the company's commitment to the sector in Ireland.

While I regret that Greencore has had to take this decision, this is a commercial decision by that company dictated by the marketplace and I have no function in this regard.

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