Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am replying on behalf of the Tánaiste and Minister for Enterprise, Trade and Employment and thank Senator Bannon for raising this important matter on the Adjournment.

The Tánaiste is very disappointed that this important investment for the Longford area has been cancelled. Cardinal Health Incorporated has decided not to proceed with its proposed investment in a new pharmaceuticals facility in Longford due to a significant change in its business priorities following a series of corporate acquisitions over recent times. The company had taken an option on land for the project in Longford from Longford County Council.

At the time of the announcement in December 2000 of Cardinal Health's intention to build a pharmaceutical facility in Longford, this project was seen as an important part of the company's strategy for Europe. Cardinal Health decided in October 2002 to postpone its proposed investment in Longford for up to two years due to changing business priorities. Since 2000, Cardinal Health has grown by acquisition and has acquired additional manufacturing capacity in the USA and Puerto Rico. In December 2003, Cardinal Health acquired the UK Intercare Group plc, a contract manufacturing and distribution business with six manufacturing facilities in the UK, Belgium and France. This acquisition satisfied Cardinal Health's manufacturing capacity needs in Europe.

Since the approval of the Longford project in 2000, the IDA has maintained continuing contact with Cardinal Health and stressed that a greenfield project in Longford would augment the company's existing strategy. This included regular meetings in Ireland and the US with senior corporate management on advancing the project. However, the recent Intercare acquisition changed the position. The decision not to proceed in Longford was communicated by Cardinal Health to IDA Ireland and Longford County Council at a recent meeting in London.

IDA Ireland remains committed to the development of the Longford area. There is a degree of confidence arising from the on-site progress in Longford of Abbott, which plans to provide up to 600 jobs there, with related sub-supply opportunities for indigenous companies. Enterprise Ireland continues to work with its strong base of client companies in County Longford. Examples of recent positive developments by EI-supported companies in Longford include expansions by Green Isle Limited, Century Homes and Fenelon Engineering Limited. Green Isle Longford grew strongly in 2003, more than doubling its full-time employment to 160 people. Century Homes, the innovative manufacturer of timber-frame housing, is expanding and doubling its workforce from 40 to 80 people. Fenelon Engineering, employing 129 people, has completed the consolidation of its operations from three locations to the 90,000 sq. ft. former Barbour Threads premises.

Under Enterprise Ireland's 2002 community enterprise scheme, the Longford County Enterprise Board, as a lead partner, was approved €330,500 in capital and management grants for the provision of a community enterprise centre in Longford. The board is seeking full planning permission for this development, which will support new start-up enterprises. Under the Government's major decentralisation programme announced in the budget, 130 jobs are to be relocated to Longford. This move demonstrates the Government's commitment to balanced regional development and will provide a further boost to enterprise development in the county. The Tánaiste is satisfied that the combined efforts of the State development agencies under the aegis of her Department, in co-operation with local interests, should provide an adequate framework to ensure continued job creation and investment in the Longford area.