Seanad debates

Wednesday, 27 September 2006

7:00 pm

Michael Finucane (Fine Gael)
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I wish to share my time with Senator Brennan. It is disappointing that a liquidator has been appointed to Castlemahon Foods Limited. We have to remain optimistic that the liquidator might be able to save some of the jobs or that an alternative owner can be found.

Castlemahon Co-op was established in 1920 and entered poultry production in 1960. This internationally recognised brand has been synonymous with poultry for the past 50 years. O'Kanes, which is based in the North of Ireland and took over the plant more than 20 years ago, has claimed that the plant has been losing money for the past few years. However, many in the area would contend that capital investment has been lacking compared with the parent company's plant in the North of Ireland. We have reached the point where the liquidator has moved in and there are fears for the future of the 350 workers employed in the production plant, mill and hatchery. Producers and breeders are equally concerned because many are farmers who earn their main incomes from supplying the plant. In January 2005, Kantoher Chickens closed down only a few miles away with the loss of 150 jobs. The future of an area which was synonymous with the production of poultry therefore looks bleak.

The Minister for Enterprise, Trade and Employment, Deputy Martin, visited the constituency recently with regard to a plant in Newcastle West which was destroyed by fire and rebuilt by its parent company. The last plant to be established in west County Limerick was the bicycle helmet company, Gyro, in 1990. All that remains of that company in Newcastle West is a marketing unit employing four people. The people of the area are concerned about the lack of industrial development, and significant pressure is being put on public representatives in that regard.

Some time ago, I wrote to the Industrial Development Authority on the matter, only to receive an extremely disappointing response comprising a thesis on industrial policy without any reference to the jobs poverty that exists in County Limerick. That will have to change and the pressure is on the Minister to create jobs in the area. I am interested in the response from the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Killeen, because I am sure consultations have taken place between his Department and the liquidator with a view to determining whether any hope exists for the workers in Castlemahon as they face into the Christmas period. I hope my hopes will be raised by the end of this debate.

Michael Brennan (Progressive Democrats)
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I thank Senator Finucane for sharing his time on this matter. He has given a detailed explanation of the situation pertaining to Castlemahon Foods and pointed out that the company has been a major employer for the past 50 years in an area heavily dependent on agriculture. I join my colleague in asking the Minister of State to offer every assistance at his disposal in safeguarding the jobs and finding a solution to the grave problem currently facing west County Limerick. The suppliers to the plant, who have made significant commitments, also face a perilous future.

Photo of Tony KilleenTony Killeen (Minister of State, Department of Enterprise, Trade and Employment; Clare, Fianna Fail)
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I thank the Senators for raising this matter on the Adjournment. I was very disappointed to hear that a liquidator has been appointed and that there is to be a hearing in the High Court next month on the matter. I am conscious of the effect that the job losses will have on the workers and their families as well as on the surrounding community. This is distressing news for those who will lose their jobs. I assure the people concerned that the relevant State agencies will provide every support they can. The priority in the event of closure will be to find alternative employment for those involved at the earliest opportunity. The role of FÁS, the State training agency, will be particularly important in assisting those who are to lose their jobs.

In February 2005, the company announced a restructuring plan which involved a reduction in staff numbers from 410 to 260. In May of that year, the company confirmed that workers had accepted the redundancy offer by a large majority. Unfortunately, matters have not improved over the past 18 months but have continued to decline. Due to a fiercely competitive market and increased volumes of cheaper imports from abroad, the current level of profitability in the Irish poultry sector is very low. Nevertheless, I understand the liquidator will be working closely with the management of the company and other interests over the next few weeks in an effort to find new owners for the enterprise.

The company has been operating in an extremely competitive market and had been trading at a loss for a number of years. During this difficult period, Enterprise Ireland has been in regular contact with the company. Discussions were centred on potential involvement by the agency in the future development of the company. However, despite the best efforts of all concerned, it was not possible to avoid the situation that has now been reached.

Given its local presence in the area, Shannon Development has moved quickly to assist with efforts to minimise the effect of the closure on west County Limerick and, in particular, the Newcastle West area. Within 24 hours of the public announcement Shannon Development arranged a meeting of West Limerick Resources Limited, a local group in which Shannon Development is an active board member. The group, which is chaired by Shannon Development and comprises key local groups in the area, has done much valuable work following the closure of Kantoher Chickens last year with the loss of 138 jobs. Together with representatives from County Limerick CEB and West Limerick Resources Limited, the agency will be meeting all public representatives in the area to discuss how Shannon Development can support those affected by the closure. Shannon Development will quickly establish an internal working group to identify opportunities to assist those affected. As well as these particular initiatives Shannon Development will remain in close contact with the Newcastle West chamber of commerce.

The most recent live register figures, which are for August 2006, show a total of 6,327 for Limerick city and 1,006 for Newcastle West. While the figure for Limerick city is down from 6,769 in the corresponding month in 2002, the figure for Newcastle West is up by 79. However, overall figures for Limerick city and county show a decline in the live register figures from 8,593 in August 2002 to 8,253 in August 2006. West County Limerick in general is well served with industry and major companies such as Wyeth, Aughinish Alumina, Kostal, Ballygowan and Pallas Foods are the major employers in the vicinity of Newcastle West.

In 2004, Shannon Development completed the land purchase and business plan for a new business park in Newcastle West. The park is located on a 40-acre site adjoining the town and infrastructural and servicing work on the first 20 acres is in place. A BBS unit approved by Shannon Development is now in place in the business park and clients are being sought. Shannon Development has sold three sites to industrial companies and construction on these sites should commence by the end of this year. In addition to the developments already under way, Shannon Development has solid inquiries on its books on site purchases for the business park. It is Shannon Development's view that these developments will help to strengthen the industrial base of the Newcastle West area.

A central goal for the industrial development agencies is the achievement of balanced regional development. The attractiveness of County Limerick lies in its position as a regional gateway, with the critical mass and infrastructure needed to attract mobile investment to the region. Both the Government and the agencies recognise the need to provide high volume employment opportunities in County Limerick that provide sustainable long-term jobs. The strategies adopted have proved successful to date despite a competitive and ever changing global economy.

While it is disappointing to see job losses in the poultry sector, County Limerick fortunately has a strong base of foreign direct investment jobs. The most recent figures available, which are for December 2005, reveal 38 overseas companies employing over 8,500 people in permanent jobs and a further 1,500 in temporary and contract employment. Most of these 10,000 jobs are in the environs of the city but as a result of the job losses in the company concerned, I am confident that the State development agencies will strengthen their marketing and promotion efforts in the region and will make every effort to secure alternative employment for the area. This will be done in partnership with other key players to maximise the flow of potential investors for the area and to convert these into investment and job opportunities.