Dan Neville (Limerick West, Fine Gael)
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I thank the Ceann Comhairle for allowing me raise this issue. I wish to share one minute of my time with Deputy Cregan, my colleague from west Limerick, to give him an opportunity to tell us what his party, Fianna Fáil, intends to do to overcome the difficulties in west Limerick. I presume the Minister of State is taking the matter. In view of the fact that the Minister for Agriculture and Food was in the House a short time ago, it is disappointing that she is not here to take it.

I use this opportunity to raise the serious loss of jobs in the Kantoher area of west Limerick, in the very west of the constituency. A total of 140 jobs have been lost directly, at least 30 in the transport area and 20 more in services. Almost 200 jobs have been taken out of a deprived area. Having examined the figures, outside the towns of Abbeyfeale and Newcastlewest there has been a drop in population in the area over that time. The Kerry Group has a responsibility in this area regarding the people of the area and their staff. A decision has been made, however, and we must expect and demand that the Kerry Group honour the long-term commitment of the people of the area to Kantoher Chickens.

Kantoher Co-op has been in operation since 1904 and has been producing broiler chickens for over 40 years. Prior to that it was involved in the poultry breeding area. In the 1950s, it was the largest co-op in the country. Its closure will have a devastating effect on the area. There is an onus on the Government and, in particular, Fianna Fáil to take action. The people of west Limerick delivered two seats to the latter party in the most recent general election, thereby doubling its representation in the area. The Government has a responsibility to ensure that these jobs are replaced and that a task force is established immediately to see that this is achieved.

There is a good cold storage facility in Kantoher but even if this is found to be unsuitable, at least 140 jobs must be created in the area. It is reasonable to expect that this is done because it has been done elsewhere. We heard about the successes enjoyed by task forces in places such as Galway, Clonmel and elsewhere when the leader of the Minister of State's party served as Minister for Enterprise, Trade and Employment. At a time when people are boasting, and perhaps rightly so, about job creation, we are asking the Government to ensure that the 140 jobs that will be lost at Kantoher will be replaced in double quick time with the involvement of IDA Ireland, Shannon Development, the Department of Enterprise, Trade and Employment etc.

The people of the area in question need these jobs. It is one of the most deprived areas in the county and we look forward to a positive response from the Minister of State. I look forward to hearing Deputy Cregan's comments. I am sure he has considered this matter during the past week and that he has communicated with the Minister for Enterprise, Trade and Employment in respect of it.

John Cregan (Limerick West, Fianna Fail)
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I thank Deputy Neville for sharing time. Like Deputy Neville, I share in the sadness experienced by people in west Limerick in recent days as a result of the loss of 140 jobs in the Kerry Group at Kantoher Chickens. I am concerned for the 40 growers who depend on Kantoher and for those who provide indirect services.

I call on the Kerry Group to provide west Limerick and the people of Kantoher with a goodwill gesture. Kantoher Chickens was founded on a co-operative basis 101 years ago. I call on the Kerry Group to return the buildings and the infrastructure to the community. I have spoken to the Minister for Enterprise, Trade and Employment in recent days and I know he, with the various State agencies and Shannon Development, will ensure that a task force will be put in place to deliver new jobs to west Limerick, particularly Kantoher. I hope we will be able to use the current infrastructure to help create such jobs. This would be to the long-term benefit of west Limerick.

I encourage everybody concerned to ensure that these jobs are created for the sake of the workforce, the growers and everyone involved with Kantoher. Every household in the parish of Kileedy has been involved with the company during its many years in operation and they deserve the gesture to which I refer from the Kerry Group.

Tim O'Malley (Limerick East, Progressive Democrats)
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I thank Deputies Neville and Cregan for raising this matter on the Adjournment.

The Kerry Group acquired Kantoher Chickens in 1992. The company operated successfully up to five years ago when it began to sustain losses. These losses have grown in the interim and, despite the best efforts of the excellent local workforce, the company was unable to reverse this trend due to its size and the very competitive nature of the chicken processing sector. I understand the Kerry Group tried unsuccessfully to sell the operation as a going concern. As a result, it has decided to close its chicken processing plant in Kileedy, Newcastle West, County Limerick, on 4 March 2005 with the loss of 138 jobs.

The reason for the closure is the very competitive nature of the market and that there is over-capacity in the chicken processing sector. The trend in this sector, as with other sectors in the agri-food industry, is for consolidation into larger processing units of scale. The company view is that the plant is small by industry standards and it was not willing to contemplate further investment.

The Kerry Group has indicated that it plans to offer the employees an opportunity to take up alternative positions in either its food ingredient operations in Charleville on the Limerick-Cork border, where a major expansion is taking place, or Listowel, County Kerry, where demand for workers is also increasing. An out-placement consultant has been put on site in Kileedy to assist those employees who are not interested in this offer of alternative employment. A redundancy package is being negotiated for members of the workforce who do not wish to transfer. The employees at Kantoher Chickens are drawn from a wide geographic area in west Limerick and the offer of redeployment by the Kerry Group to the other plants in Charleville and Listowel will allow Kantoher based employees to continue to live in the area, preserve their incomes and commute to work in an activity they know well, if they so wish.

The Kantoher plant accounts for about 8% of chickens slaughtered in this country. I understand that the poultry producers who supplied this operator will now be taken on by Western Brand Poultry. This is good news because poultry growing makes a useful contribution to the income of farmers in the Limerick area and I am glad that this activity can continue. Western Brand Chickens, which is located in County Mayo, is one of Kantoher's bigger competitors and, fortunately, will take on the supply contracts of the 40 local farmers that supply Kantoher.

I understand from the Department of Agriculture and Food that there is excess capacity in the poultry slaughter sector which is hampering the competitiveness of the indigenous poultry industry. The agri-food 2010 committee established by the Minister for Agriculture and Food recommended a reduction in capacity in the order of 20%. This is a very competitive sector due, in particular, to the increased volumes of poultry meat being imported from low-cost countries outside the EU. Nevertheless the volumes of poultry produced in this country have remained at satisfactory levels and an increase of 4.5% was experienced last year.

West Limerick in general is well serviced with industry, with major companies such as Wyeth, Aughinish Alumina, Kostal, Ballygowan and Pallas Foods being the major employers in the vicinity of Kantoher. However, the closure of the plant is, of course, a significant setback to a predominantly very rural area and the chances of getting a replacement industry into a disused chicken plant would not be too good. To achieve this would require the decommissioning of the plant and the fumigation of the building. It would also need to be made available as a vacant unit. If that were to happen, there would be a possibility of attracting industrial activity to the building.

As in all such cases, Shannon Development is ready and willing to explore and consider eligible business proposals for the Kantoher area, whether from employees taking the redundancy option or other parties. It is also an active member of local groups such as West Limerick Resources Limited, a local Leader-ADM group which met last week to discuss this issue. West Limerick Resources Limited will shortly write to the Kerry Group to offer its services with local initiatives such as a jobs club, training and start your own business courses. Similarly, Shannon Development is actively involved with the Newcastle West Chamber of Commerce and will work closely with it to ensure that its resources are brought to bear in regenerating the Kantoher-Kileedy area.

When these efforts are combined with the arrangements the Kerry Group is putting in place for both employees and suppliers, it is intended that the effects of the closure on the community will be minimised. I trust there will be a satisfactory outcome to the proceedings for all concerned.