John Browne (Wexford, Fianna Fail)

I share Deputy Cregan's concerns for those workers affected by the recently announced job losses at Castlemahon Food Products Limited. The decision by the company to lay off 150 staff has been taken in the context of a major restructuring programme designed to improve its cost base and to secure its future operation. This is a commercial decision by the company. Castlemahon is owned by O'Kane's Poultry, Ballymena, County Antrim, a major Northern Ireland poultry operator, and the announced restructuring is part of a groupwide initiative. Castlemahon has been an important employer in the Limerick area. While the company will seek to achieve the reduction in numbers through voluntary redundancy, there will be huge disappointment among affected employees and their families. There is never a good moment to announce a restructuring that causes job losses. However, decisions that have broader strategic aims are quite often critical in securing the sustainability of an organisation and maintaining jobs.

The company has indicated that it will retain 260 full-time jobs and, therefore, will continue to be a vital element of the west Limerick economy. Last year, Castlemahon Food Products Limited processed approximately 10 million chickens, accounting for 15% of national throughput. The company intends to maintain and possibly increase the volume of poultry throughput. I urge it to work towards this objective. Approximately 60 farmers are engaged in the rearing and supply of chickens to the Castlemahon company, making a valuable contribution to agricultural incomes in the area. I am glad there is no threat to this. The Castlemahon-O'Kane group has a significant presence and experience of selling in the UK market. Getting its cost base down is essential to its ability to compete in that market. I am optimistic that the company will continue to be a successful and significant contributor to the poultry sector.

My Department has been in contact with Enterprise Ireland on the matter. For some time, Enterprise Ireland has been engaging with the company and will continue to work with it to develop the existing business and secure optimal production levels and sales. The Department of Enterprise, Trade and Employment has stated that the full services of FÁS will be made available to any workers who wish to use those facilities. Particular services of relevance to affected workers are those relating to retraining and upskilling. This will be of assistance to them in getting back into the labour force at the earliest opportunity. Fortunately, west Limerick is well serviced with industries by several major employers in the area. My Department will continue to maintain a permanent veterinary presence at the plant and will assist in every way possible in its ongoing operations.

The poultry industry is a competitive sector due to the increased volumes of poultry meat imported from low-cost countries outside the EU. Nevertheless, the volumes of poultry produced in Ireland have remained at satisfactory levels for both producers and processors, with an increase of 4% in 2004. The poultry and egg sector is an important part of the overall agrifood industry, with a farmgate value of €150 million. The sector provides valuable employment, supplying quality products to the domestic and export market. Last year approximately 66 million chickens and 10 million birds of other species were slaughtered, maintaining high level continuity of production in the face of increased competition from imported products.

Despite increased import penetration, the poultry sector is a net exporter, when the valuable processed products sector is taken into account, contributing €244 million to our balance of payments. Increasingly the industry, in common with other sectors, must face up to the pressures of severe price competition from lower cost products from abroad, a fact of international trade. The trading environment is undoubtedly difficult. Tight controls on costs, full capacity utilisation and economies of scale are essential to the prosperity of the indigenous poultry industry.

The Castlemahon company announcement is aimed at strengthening its cost competitiveness and placing it in a better position to adapt to the current international market environment. Both the Minister for Agriculture and Food, Deputy Coughlan, and the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, are concerned at the job losses in this area and will take action on the matter.

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