Mary Harney (Dublin Mid West, Progressive Democrats)

I am taking this Adjournment on behalf of the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan. I thank the Deputy for raising this matter.

Diageo's operations in Ireland have been under review by the company for some time. The decision outlined by the company last Friday on Dublin, Dundalk, Kilkenny and Waterford was the culmination of a detailed examination of the company's existing sites in Ireland. The Minister is aware that various options were considered by the company regarding these sites.

While she welcomed Diageo's announcement on Friday last of a major new investment that secures the future of brewing in Ireland, the Minister was very disappointed to hear about the job losses indicated by the company in Kilkenny and in other counties. However, the indication by the company that it is to invest €650 million in its Guinness Brewery at St. James's Gate in Dublin is very positive news for Ireland.

The Minister is conscious of the apprehension that the proposed job losses at Smithwicks in Kilkenny will create for the workers involved and their families as well as the local community but wishes to assure the House that the State agencies will make every effort they can to develop new employment opportunities for the area and to support the retention of existing jobs in Kilkenny.

The Minister understands that a new brewery will also be built on a suitable site close to Dublin. Details of the location of the new brewery will be the subject of a further announcement by the company in due course. It will utilise leading-edge brewing technologies to deliver the best international standards of scale, efficiency, quality and environmental performance. On completion in 2013, it will be the company's biggest brewery and the largest in Ireland.

The Minister also understands that when the new brewery is commissioned, all production from the existing brewery in Kilkenny will be transferred, resulting in the closure of this facility. The brewery in Kilkenny has played a critical role in the historic success of the company's beer brands in Ireland but currently does not have the scale necessary for sustained success in increasingly competitive markets. It was not considered to be a suitable site for the size of the new brewing operation, which must be constructed while existing operations are maintained.

The company will ensure that affected employees are offered relocation opportunities where possible but, where this is not possible, they will be offered a severance package alongside career counselling and out-placement support.

Following the completion and successful commissioning of the new brewery, surplus land in Kilkenny will be available for redevelopment. The company plans to engage in due course with all relevant authorities to ensure the most appropriate development of any surplus lands consistent with local development and planning objectives. In particular, the company is committed to ensuring that any redevelopment at Kilkenny sensitively reflects the historical importance and heritage aspects of this site.

The Minister accepts the company's recognition that on completion of the project in 2013 there will be a net reduction in employment. While this is five years away, it is very important that the impact on employment is minimised and the Department of Enterprise, Trade and Employment and the State development agencies, Enterprise Ireland and IDA Ireland, as well as the State training agency, FÁS, will work closely with the company to secure the best possible outcome for all concerned. FÁS will be meeting the company to prepare an implementation plan for out-placement, training and development, to ensure a successful transition.

The Glanbia Group innovation centre in Kilkenny, supported by Enterprise Ireland, which involves an investment in excess of €15 million over four years, was officially opened by the former Minister for Enterprise, Trade and Employment on 23 June 2005. Enterprise Ireland approved an additional €6.2 million for this project in November last. A total investment of over €20 million will now take place in this facility, and an additional 14 jobs will be created in the research centre. In addition, the agency, through the Into the Regions initiative, secured a Bank of Ireland call centre, Banking 365, project for Kilkenny.

The Minister is confident that the strategies and policies being pursued by the State development agencies in Kilkenny will continue to support enterprise development and provide employment opportunities. The State agencies will continue to work closely with each other and with local interests to support the retention of existing jobs and to support an integrated approach to job creation in Kilkenny.

See this speech in context