Micheál Martin (Cork South Central, Fianna Fail)

I thank the Deputy for raising this matter. I accept the spirit in which he has raised it for debate.

Unfortunately, the Archer-Daniels-Midland Company, or ADM, announced the closure of its facility at Ringaskiddy with the loss of 146 jobs on 14 September 2005. This is a major blow to the workers and their families. I want to reassure the House, as I did on that occasion, that every effort will be made via the State agencies to respond to their needs and secure alternative employment for those workers.

The redundancies will take place from October 2005 to January 2006. The company has cited what it terms "non-viability of the business" as the reason for the plant closure. We were not informed about the actual closure until the day of the announcement. I will give some of the background issues later as to how the IDA was dealing with the company on an ongoing basis.

Following our instructions I met with FÁS personnel. FÁS met with senior managers of ADM Ringaskiddy and all staff will be registered with FÁS. The full range of FÁS services will be offered to the staff. Indeed, FÁS has already met with some ADM workers and there has been a good deal of interest in pursuing the courses on offer.

ADM in Ringaskiddy manufactures citric acid, sodium citrate, potassium citrate, gluconic acid and other products for the food industry. The biggest single product is citric acid, which is an ingredient in soft drinks. The business and site was acquired from Pfizer in 1990. Employment at the time of the closure announcement earlier this month was 150 people.

It gives me no satisfaction to have to say the site in Cork has had a turbulent recent past. As an essentially commodity-based business there has been increasing cost pressures on production facilities. In early 2003, I understand that suggested changes on the site were rejected locally. The company then closed the site and there were many disputes at the time. I met the workers concerned. The company then conducted a fundamental review of the viability of future operations at Ringaskiddy. The plant remained closed for more than five months while the review was undertaken and subsequent negotiations with SIPTU were completed. At that time 180 people were employed and 70 of those availed of a severance deal. A new package of conditions was agreed.

ADM Ringaskiddy is a client company of IDA Ireland and the agency maintained contact with the local and parent companies throughout the difficulties in 2003. As I mentioned, the business in Cork is commodities-based and there was concern over the company's medium-term future in manufacturing, particularly with the bulk of the world's citric acid being sourced in China. In particular, meetings were held between IDA and the company in early 2004 to discuss additional responsibilities for the Cork operation.

ADM has grown substantially in Europe over the past 15 years by acquisition. The European headquarters has at various times in the recent past been in the Netherlands and London before moving to its current site in Hamburg. The company generally operates a divisionalised and decentralised structure in Europe. However, ADM is in the final stages of implementing a standard IT platform for its financial affairs. The Irish company spotted an opportunity to take control of the European treasury function for all ADM businesses early last year. Treasury activities are controlled from Cork but with the bulk of the transactions outsourced. The company is undertaking a major overhaul of its banking relationships and arrangements throughout Europe. This is the only function that will remain in operation in Cork but only four people will be employed.

IDA Ireland has recently met company representatives to discuss ways and initiatives in marketing the existing facility and lands as an option for potential foreign direct investment. The industrial development agencies will be making every effort to secure alternative employment for the area. Over the past 11 years direct employment in IDA-supported companies in Cork city and county has grown from 10,345 in 1993 to 18,648 in 2004. The sectors contributing to this growth are ICT, pharmaceuticals and medical technologies, and international services. Over the past five years IDA Ireland has approved new projects for the Cork area with a job potential of up to 5,000 people at full operation. This growth is expected to continue into the future. There are currently 137 IDA supported enterprises in Cork city and county.

In July 2005, Pfizer Incorporated, the largest pharmaceutical company in the world, announced it is to invest €20 million to establish a high containment development facility at Pfizer Ireland Pharmaceuticals, Ringaskiddy, County Cork. In July 2004, Centocor, a wholly owned subsidiary of Johnson and Johnson, announced plans to construct a new biopharmaceutical centre of excellence at Ringaskiddy. The project, regarded as a key strategic biopharmaceutical investment, will employ an estimated 330 people over five years. This follows the announcement in 2003 of investments by Italian pharmaceutical company Recordati and GlaxoSmithKline in new research and development activities in Ringaskiddy. We would hope that some of the workers from ADM could be recruited to these new enterprises. FÁS will endeavour to use its placement service with this in mind and will retrain people for the biopharmaceutical sector.

Other recent new project announcements in Cork include Ellison, Engenio, McAfee, AK Pharmaceuticals, Altera, Ecora and Centocor, which will all add to the value and depth of overseas industry in Cork. Enterprise Ireland will continue to do what it can to increase employment in the area. Since January 2004 Enterprise Ireland has approved funding to client companies totalling €18.9 million. I assure the Deputy that the State development agencies, under the auspices of my Department, will continue to work closely together and with local interests in promoting Ringaskiddy for further job creation and investment.

The Department has an early warning system and generally companies alert IDA Ireland which then alerts me or my officials regarding potential difficulties. While there would have been overall concern over the medium-term prospects, this matter did not feature on such a system until I got it on the day.

See this speech in context