I share the concern of the Deputies for the future of the jobs at this plant. The company involved, CTM Southborough, was formerly known as Southborough International Limited. The company has been established in Kells for over 20 years and is a major employer in the locality, providing valuable employment for up to 220 people.
Southborough had, until September this year, been a wholly owned subsidiary of Unidare PLC and it specialised in the manufacture of sheet metal components to electronic and computer original equipment manufacturers, or OEMs. Dell Computer accounted for the bulk of the company's high volume business. Southborough was not involved in the manufacture of injection moulded parts and it was recognised for some time that this could be a factor in its longer term viability.
I should explain that many OEMs have for some time been moving away from in-house manufacturing to outsourcing of production activities which they do not see as core competencies. In doing this they are demanding a fully integrated contract manufacturing service on a globalised scale. In this way, OEMs can adopt a single product design for the world and give it to a select number of fully integrated contract manufacturers who have globalised facilities and can manufacture the product to a common standard for supply to world markets.
For the contract manufacturers or sub-suppliers, this globalisation means providing the OEMs with manufacturing facilities around the world. Inevitably, market forces will determine that single location contract manufacturers will lose out to the larger, globalised and fully integrated contract manufacturers.
In line with these developments, the major computer manufacturers in Ireland, as elsewhere, have strongly signalled for some time that they only wish to deal with suppliers who could both supply integrated components comprising both metal and injection moulded parts and supply all the OEM plants on a global basis. As I said earlier, the inability of Southborough to function as an integrated supplier of metal and plastic components and its lack of a global supply capability have long been recognised as factors which could put its future at risk. The company earlier this year identified as a potential partner Complex Tooling & Moulding Inc. — CTM. This is a 30 year old private company operating six facilities in the United States serving the computer, computer peripheral and telecommunications industries in the US. I understand the acquisition of Southborough by CTM was completed in September.
CTM indicated to Enterprise Ireland that its intention on acquiring Southborough was to invest in equipment to manufacture injection moulded components and to offer an integrated service to a number of companies in Ireland and elsewhere from Kells. Their plans would have preserved existing jobs and CTM signalled that investment in injection moulding equipment could create additional jobs.
However, Enterprise Ireland was advised on 20 November that CTM/Southborough had lost its Dell contracts to a rival supplier. This has given rise to a significant proportion of the jobs at the Kells plant being under serious threat.
As the Deputies are aware, on last Tuesday, 1 December, the Tánaiste and Minister for Enterprise Trade and Employment, Deputy Mary Harney, met with a deputation of public representatives and representatives of management and the workforce to discuss the serious situation arising at the company. She conveyed to them her serious concern at these developments and indicated that IDA Ireland was arranging an urgent meeting with the US parent company, CTM, to clarify its intentions on the plant.
A meeting between IDA Ireland and the president and chief executive of CTM took place in the United States in recent days. I understand the company has expressed a commitment to keeping the Kells plant open and is currently addressing the restructuring measures necessary to achieve the survival of the plant. However, notwithstanding such action, job losses of the order of 120 are expected early next year. Both the company and IDA Ireland are also in contact with the company's major customer in relation to existing business. Simultaneously, the industrial development agencies are working closely with the company to secure the future of the Kells plant and offer every assistance in the company's efforts to identify alternative markets and job opportunities.
I know this company has provided valuable employment in the Kells area over the years and I am aware of its importance as an employer in the local economy. Every effort will be made by the Government to minimise the job losses involved and maintain the plant as well to find alternative jobs for workers affected.
I pay special tribute to both of the Deputies and their Oireachtas colleagues in the county for their concern about this project and I assure them that their proposal for a task force has my full support. I would like to see a taskforce established involving the county enterprise board, the county council, Enterprise Ireland, the IDA and the various other State agencies, so there would be in position some alternative structure to direct sustainability for the company and alternative employment in the Kells area. I will recommend this to the Tánaiste and the Deputies can be assured that I, the Tánaiste, officials and the State agencies, including the IDA, Enterprise Ireland and the county enterprise board, will do what we can to ensure these jobs are sustained as far as is possible and that new investment is brought to the area as quickly as possible.