Michael Ahern (Cork East, Fianna Fail)

On behalf of the Minister for Enterprise, Trade and Employment, Deputy Martin, I thank Deputy Boyle for raising this matter.

The recent job loss announcements last week relate to Schering-Plough and Dairygold. Schering-Plough, Brinny, was established near Innishannon in Cork in 1986. It is a fully integrated bio-pharmaceutical facility involved in the production of Schering-Plough's cancer and hepatitis treatment products, Intron and Interferon.

Schering-Plough has announced a reduction in its workforce resulting in the loss of 161 permanent and contract staff over the next 12 months. It is expected that the job losses will occur from the second quarter of 2005. The lay-offs will initially be on a voluntary basis but I understand if the company does not achieve the necessary reduction, there will be compulsory lay-offs. This will then bring employment in Cork to approximately 560. Schering-Plough had already announced in December 2003 that it would reduce its staff numbers in Innishannon by 170. This was achieved through voluntary redundancy and the ending of temporary contracts.

As regards Dairygold, I understand that, subject to the approval of the Competition Authority, Glanbia plc and Dairygold Co-operative Society have reached agreement that Glanbia will take over the operation of the CMP liquid milk, cream and juice branded business of Dairygold. I further understand that the proposed development includes the relevant sales and distribution assets of CMP but excludes the production and chill facility.

Under this proposed new arrangement, 58 CMP distribution staff based in Cork will transfer to Glanbia and approximately 38 staff in the CMP milk processing operating in Cork will be made redundant. At that stage FÁS, Enterprise Ireland, IDA Ireland as well as the county enterprise boards will be in contact with the company offering its full range of support services. These supports include job placement, guidance interviews and the identification of training needs as well as the provision of suitable training courses.

It is also envisaged that butter production in Dairygold's plant in Mallow, County Cork, will cease with the loss of 21 jobs and that Glanbia will manufacture Dairygold's branded butter and butteroil under contract at its facility in Ballyraggett, County Kilkenny. With the cessation of butter production in Mallow, Dairygold will concentrate on milk production in its Mallow plant during the peak milk season.

However, there was also good news from Donegal last week when the company confirmed that it has completed a long-term contract for the manufacture of Jarlsberg cheese under the contract for the European market. Jarlsberg cheese is Norway's prime cheese export and the best-selling imported cheese in the US. This contract will secure the immediate future of Dairygold's plant in Mogeely, County Cork. The company also announced last week that it is in discussions with Enterprise Ireland to explore the establishment of a food sciences research and development facility in Mitchelstown and that it hopes to have these proposals fully developed over the next six months.

Over the past ten years, direct employment in IDA Ireland-supported companies in Cork city and county has grown from 10,345 to more than 18,000, an increase of more than 7,600. The sectors contributing to this growth are information and communications technologies, pharmaceuticals and medical technologies and international services. Over the past four years, IDA Ireland has approved new projects for the Cork area with a job potential of up to 5,000 people at full production. This growth is expected to continue into the future.

Enterprise Ireland continues to work with companies in County Cork to assist them in growing their sales and exports and improving innovation in order that they can compete on world markets. In 2004, Enterprise Ireland approved support of more than €9 million and paid more than €5.6 million to its client companies in Cork city and county. Enterprise Ireland also approved support of more than €2.7 million for third level and industry innovation partnerships in Cork, covering 47 projects, during 2004. These partnerships encourage the adoption of new technologies by industry.

As part of its ongoing commitment to fostering closer links between academia and industry, Enterprise Ireland has committed €2.54 million in funding assistance towards the provision of incubator units and research facilities at Cork Institute of Technology. Construction has commenced and this 12,500 sq. ft. facility is scheduled for completion in October 2005. The facility is designed to encourage the development of campus companies across all disciplines.

I would also like to mention a number of other positive developments that are taking place in Cork. Cork is European capital of culture for 2005. An Aer Rianta investment of €140 million for Cork Airport is scheduled for completion early next year. The Kinsale roundabout flyover is due to start construction in the first quarter of this year and will be completed in two years. It is intended that by 2009, there will be a continuous motorway or dual carriageway between Cork and Dublin. All these initiatives will contribute to providing significant employment opportunities for Cork.

Unfortunately, however, there have been job losses in, for example, Nestlé in Mallow. FÁS is engaged with both Nestlé and Schering-Plough, and the full range of FÁS upskilling and mainline courses will be on offer to all employees. Job losses and gains have always been, and will continue to be, part of our economic activity.

Fortunately, our current overall unemployment rate is among the lowest in Europe. The latest live register figures for January 2005 showed that the unemployment rate is 4.2%. The live register figure for Cork has dropped by more than 1,300 from January 2004 to January 2005. We can look forward to the future with confidence.

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