Dáil debates

Tuesday, 16 November 2004

8:00 pm

Joe Sherlock (Cork East, Labour)
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I hope when I have concluded my contribution the Minister of State will not say the Government or his party have no say on this matter. I refer to the closure of the Nestle plant in Mallow, which uses approximately 20,000 tonnes of sugar supplied by Mallow sugar factory and 15 million gallons of milk supplied by Dairygold. The plant employed 57 people and this is the greatest blow that has ever been struck in the north Cork region. Nestle produces chocolate crumb in Mallow and in Girvan, Scotland, and it is proposed that the Girvan plant will be retained.

The silence of the IFA and the ICMSA regarding the factory closure in Mallow and the transfer of jobs by Dairygold from Mallow and Mitchelstown to Cork is tantamount to them selling their birthright for a mess of potage. Nestle stated the Scottish facility would be retained in favour of the leased Irish based facility in Mallow. The property is leased from Dairygold. The co-operative voice of milk and beet producers should be conveyed to Dairygold management, otherwise the dairy industry and the jobs it provides in the region will be no more. The region has been hit hard and I seek Government intervention there. It would be worthwhile if the Minister of State at the Department of Enterprise, Trade and Employment were to visit Mallow and meet the management of Dairygold and Nestle.

Dairygold staff are being transferred from Mallow and Mitchelstown to Cork. The staff were informed earlier that 20 December is D-Day. They will be supplied with boxes to move their materials and they will be bussed between both towns and Cork for 12 weeks. I call on the Minister of State to involve himself and the Government in this issue. The job losses at Nestle could impact on the sugar beet and diary industries. It is a serious matter and the development of agriculture and domestic production must be examined. I hope the Minister of State's response will be positive.

Photo of Noel TreacyNoel Treacy (Minister of State, Department of Foreign Affairs; Minister of State, Department of An Taoiseach; Galway East, Fianna Fail)
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I thank the Deputy for raising this matter on the Adjournment. On Thursday 11 November 2004, Nestle announced its intention to close its chocolate crumb production facility at Mallow, County Cork. The facility is based at the Dairygold plant in Mallow and employs 57 people. Nestle stated a strategic review of its business requirements for chocolate crumb identified that, due to improvements in production methods and the loss of the chocolate crumb contract for the Canadian market, these requirements could best be met at its facility in Scotland. Nestle also stated the closure of the Mallow facility is to take place by March 2005.

Dairygold does not accept that Nestle is entitled to implement such a decision and the co-operative has instructed its legal advisers to take immediate legal action against Nestle regarding the enforcement of Nestle's agreements with Dairygold. Pending the outcome of High Court injunction proceedings, Dairygold has indicated it will make no further public statements in the matter.

I assure the Deputy that Mallow is a location of focus for the Industrial Development Agency. The IDA is marketing Mallow as a location for foreign direct investment through its network of overseas offices, in particular the availability of a 6.27 hectare fully serviced site and an advance factory of 2,072 square metres. The relatively recent arrival of Kostal to Mallow has been a significant asset to the economic development of Mallow and north Cork. More than 400 people are employed at the Mallow operation. Mallow is designated as a hub town under the national spatial strategy, which will lead to significant development in the medium to long term, and this has the potential to benefit the north Cork area.

From an inward investment perspective, Mallow, due to its proximity to Cork city, also stands to benefit from the continued development in the Cork area where over the past ten years direct employment in IDA supported companies in Cork city and county has increased from 10,345 in 1993 to 18,162 in 2003. With 134 IDA supported companies in County Cork, the sectors contributing to this growth are ICT, pharmaceuticals-health care and international services. This growth is expected to continue into the future with IDA in 2003 announcing 11 new projects for Cork with the potential to create up to 800 new jobs.

Joe Sherlock (Cork East, Labour)
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That is not the issue I raised.

Photo of Noel TreacyNoel Treacy (Minister of State, Department of Foreign Affairs; Minister of State, Department of An Taoiseach; Galway East, Fianna Fail)
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To date in 2004 five new projects, McAfee, AK Pharma, Altera, Ecora & Centocor, have been announced with a job creation potential in excess of 800. Over the past four years more than 40 new projects have been approved for the Cork area with a jobs potential of up to 5,000 people at full operation.

IDA Ireland's main focus is targeting high value projects. This means companies that decide to visit Ireland today have more sophisticated business requirements. Their key requirements in determining where they will visit and, consequently, where they will potentially locate tend to centre on the following: a high quality business environment with access to a large population base; close proximity to an international airport and quality road infrastructure to allow ease of access; proximity to similar companies; adjacent to a third level institution; and often located on a business and technology park with high quality office accommodation and telecommunications infrastructure.

Joe Sherlock (Cork East, Labour)
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How did the Minister of State know about Dairygold's legal action?

Photo of Noel TreacyNoel Treacy (Minister of State, Department of Foreign Affairs; Minister of State, Department of An Taoiseach; Galway East, Fianna Fail)
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In line with addressing these industry requirements, IDA Ireland also has a focus in north Cork, on its new business and technology park adjacent to Fermoy. IDA Ireland has purchased this 20 acre site on the outskirts of Fermoy where site development works and landscaping have been completed at a cost of approximately €1.5 million. The IDA intends to seek proposals from private developers for the construction of a suitable office building on the park. It is intended that this building will be available mainly for inward investment purposes by qualifying manufacturing and internationally trading services companies.

Joe Sherlock (Cork East, Labour)
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The Minister of State has digressed from the main issue.

Photo of Noel TreacyNoel Treacy (Minister of State, Department of Foreign Affairs; Minister of State, Department of An Taoiseach; Galway East, Fianna Fail)
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In addition, IDA is also marketing the Fermoy business and technology park as a suitable location for potential green field projects. It is anticipated that future employment opportunities generated at this business and technology park will be of benefit to the north Cork area generally.

I assure the Deputy that the State development agencies, under the auspices of the Department of Enterprise, Trade and Employment, will continue to work closely together and with local interests in promoting Mallow for additional investment and job creation. I trust the legalities involved in this case have been put in context by the statement issued by Dairygold.