Brendan Smith (Cavan-Monaghan, Fianna Fail)

I thank Senator Kenneally for raising this matter. I note he has taken every opportunity available to him to address this issue and to highlight the concerns of the local community. It is clear from the Senator's contribution that he knows this subject exceptionally well.

On 5 September 2005 the board of Glanbia plc announced that its Kilmeaden cheese plant would close with the loss of 45 jobs, of which 41 were seasonal jobs. I understand that most of the workers generally worked for four or five months of each year. Glanbia intends to produce the Kilmeaden cheddar output at its larger Ballyragget facility and also at Dairygold's Mitchelstown site, where it has a milk processing agreement in place. I am assured that Glanbia will continue to evaluate alternative production options for the Kilmeaden site. While this is a commercial decision made by Glanbia our thoughts are foremost with those who will lose their jobs as a result of the decision.

The Kilmeaden brand will, however, continue to be made by Glanbia with the Kilmeaden cheese-making expertise and grading being retained and the award winning cheese-makers will use the same recipe as heretofore. Local farmers will continue to supply the same volume of milk in the same way with no additional cost or inconvenience.

The Irish food industry operates in a very dynamic and challenging global environment. If a company is to grow and thrive it must anticipate and react to the needs of its customers and consumers. Against this background it should be remembered that Glanbia, which is an international food company based primarily in Ireland with a turnover in 2004 in excess of €1.8 billion employing nearly 4,000 staff worldwide, is one of the world's top five cheesemakers. It is also the top dairy processor in Ireland accounting for over 1.3 billion litres of milk, which represents over 25% of the total allocated milk pool in the country.

The closure of the Kilmeaden cheese factory is due primarily to increasing cost pressures and the need for greater capacity utilisation within Glanbia's cheddar cheese manufacturing process. Glanbia continues to make considerable investments in research, development and innovation. In February it announced a €15 million investment in an innovation centre in Kilkenny to focus on developing products with a health based functional foods and nutritional emphasis. The centre will develop a range of nutritional solutions and functional ingredients and Glanbia is to be commended on taking the lead in investing in this high value added research facility. Innovation is at the heart of Glanbia's growth strategy and such an approach is very much in keeping with the Government's strategy for the development of the dairy industry.

In the challenging marketplace we must continue to build on Ireland's reputation as a quality food island and selectively market our products in the most appropriate locations. Consumers are demanding new products, new tastes, a focus on health and well being and convenience and all without compromising on quality or cost. The industry needs to match product mix with emerging market and consumer demands and Glanbia has been to the forefront in doing this, especially with regard to the development of new products.

I am happy to report that the interagency group, set up under the chairmanship of the Waterford county manager, in response to the announcement of job losses in Waterford Crystal, has undertaken to include the workers at Kilmeaden in its deliberations. The workers from Kilmeaden will be offered supports and guidance for their future. In addition, Waterford County Enterprise Board will provide training and mentoring to any Kilmeaden workers interested in setting up their own business.

The Government's strategy for Waterford is to promote the development of Waterford city as a gateway location with which to attract industry to the city and county. The industrial development agencies, including the Waterford County Enterprise Board, will be making every effort to secure alternative employment for the area. The county development board is also involved in overseeing and co-ordinating the industrial needs of the area.

There has been success in attracting new knowledge-based industries with the locating in Waterford of Sun Life Corporation, AOL and Genzyme and there is a strong indigenous presence with companies such as Dawn Meats and Radley Engineering.

In addition, on 22 August last, my Government colleague, the Minister for Enterprise, Trade and Employment, Deputy Martin, announced that the US financial services company Bisys Hedge Fund Services was establishing a new operation in IDA Ireland's Business and Technology Park in Waterford and this will create 250 new jobs over five years.

As part of its support for start-up companies, Enterprise Ireland has provided €2.54 million for the construction of an incubation centre at the Waterford Institute of Technology and, in addition, Enterprise Ireland has approved €155,000 towards the management of the centre. The centre has now been completed, and it is expected that the first tenants will take up residence by the end of the year. Enterprise Ireland has also provided funding for the development of a number of community enterprise centres in Waterford. The aim of these centres is to promote the development of commercial enterprises in local areas.

I am satisfied that the combined efforts of the industrial development agencies and the interagency group will promote and drive positive future employment opportunities in Waterford. I reiterate my thanks to Senator Kenneally for this opportunity to address this important issue.