Micheál Martin (Cork South Central, Fianna Fail)

I thank the Deputy for raising the issue of providing replacement jobs in Mitchelstown, County Cork. I have visited Mitchelstown on a number of occasions since I took up office to assist the town and its hinterland in its economic future and in creating new opportunities for its people by providing jobs in a diverse range of sectors.

Enterprise Ireland's principal remit is to assist the development of Irish companies in the manufacturing and internationally traded services sectors. The agency cannot provide jobs but rather can help companies grow by providing funding and advice. It provides this through its business development model, which helps to ensure all business functions of a client are addressed. A company is unlikely to succeed unless it has strength in marketing, research and development, finance, business strategy, production and human resources. El's offer is demand driven in that clients apply to the agency for assistance. The agency cannot push solutions on to clients; the relationship is a partnership, which seeks to accommodate the best interests of the client and the State.

Enterprise Ireland is also seeking to improve its work with clients. In May, EI's new strategy, entitled Transforming Irish Industry, was launched. The strategy is focused on implementing the recommendations of the enterprise strategy group to accelerate the development and internationalisation of Irish-owned business in the manufacturing sector and internationally traded services sector. A new productivity improvement fund, which will be managed by Enterprise Ireland, was also launched. Over the next 18 months, the fund will make available up to €17 million to eligible SME clients to enable companies adopt advanced technology and focus on skill developments to improve their competitive position.

Enterprise Ireland continues to work with companies in its portfolio in County Cork and in the south-west region to assist them expand their sales and exports and improve innovation so that they can compete on world markets. With regard to job creation, the agency's activity is focused on the creation of new jobs through supporting entrepreneurs setting up new high potential start-up companies, the retention and creation of new jobs in existing companies and enhancing the innovation capability of Ireland at a national and regional level through support of research in companies and third level institutions.

In 2004 Enterprise Ireland invested more than €9 million in its client companies in County Cork, of which €1.53 million, an increase from €750,000 in 2003, was for client companies in the Cork east area. This investment was primarily in support of new business employment, research and development, capital investment and staff training. Enterprise Ireland payments to companies in County Cork for 2004 amounted to €5.57 million, of which €500,000 went to companies in the east Cork area. EI works with just under 750 client companies in County Cork, which, according to the Forfás Annual Employment Survey 2004, employ a total of 19,617 people. This reflects an increase of 122 jobs on the 2003 figure. As part of its role in regional development, Enterprise Ireland's regional office in Cork works with other regional organisations and agencies in the county to develop the business infrastructure and to influence the conditions in which organic growth in the region is established and sustained.

Enterprise Ireland works on an ongoing basis with Ballyhoura Development Group. Funding was provided for the group for a food enterprise centre on the industrial estate in Mitchelstown under the community enterprise centre scheme 2002. Ballyhoura Development Group obtained approval for this new food business incubator to be co-funded through the business expansion scheme in December 2004 and the project is at planning stage. A major study is also being conducted in the Mitchelstown area to chart the way forward socially and economically for the town and Enterprise Ireland has supported that initiative.

Yesterday I announced the establishment by Dairygold Co-operative of a dedicated €15 million research and development facility in Mitchelstown. The bulk of the funding will be provided by Dairygold and significant funding amounting to €4 million will be advanced by Enterprise Ireland, which will focus on functional food research and the development of new products for the consumer foods sector. This will be a significant multi-billion euro sector going forward. This proposal represents a major step in the company's research and development capability, helping it to reduce its dependence on commodity products. It will greatly assist the company in its objective of becoming a leading producer of higher margin, added value, chilled food projects and functional food and ingredients.

The research and development facility will lead to the creation of high quality employment for 15 graduates in food sciences, three of which will be to PhD level, with the remaining 12 to masters and BSc levels. The development will double Dairygold's research and development staff from 15 to 30. Ultimately, the centre will have capacity for a total of 50 personnel. It is expected this will be reached post-2007. The new centre will incorporate a highly specialised pilot plant facility. The aim is to ensure the maximum potential is derived from applied research both in terms of new business establishment and technology transfer. This will be facilitated through Enterprise Ireland's links with third level institutions and industry, including Moorepark in Fermoy.

As a result of Enterprise Ireland investment in research and development in the Kepak plant in Watergrasshill, on 13 June 2005 I announced the company's plans for a major expansion into heat and serve added value range of meat products. This includes beef, pork, chicken, lamb and turkey and is targeted at the food service and retail markets. The proposed €25 million funding includes fixed asset investment as well as marketing, research and development and HRD investment. The planned investment will result in an increase in sales of €55 million and employment by 155, bringing the total projected jobs on site to 450.

I will address the issues raised by the Deputy with Enterprise Ireland. However, investment in research and development is the key for the future success not only of the food industry but of the economy generally. The number of value added products must be increased. Whatever are the issues regarding other sectors of Dairygold or decisions made by the company, they should not be used to attack a bona fide and interesting development in investment in research and development at the plant.

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