asked the Minister for Agriculture if he will state the total amount expended by the Government in advertising for and loading animals for the Roscrea factory; the total amount paid for the animals; the total amount loaned to the company; the total Government liability by way of guarantee; and the total estimated value of the company's premises and plant.
Ceisteanna—Questions. Oral Answers. - Roscrea Factory.
The amount expended by the Government in advertising the scheme from its inception (July, 1935) to the 31st January, 1938, was £1,206. It is not practicable to give the figure for the cost of loading animals as the officers of the Department undertaking this work are also engaged in other work and it would be a difficult matter to segregate with any degree of accuracy their expenses as between their different services. The total sum paid for animals from the inception of the scheme to the 31st January, 1938, was £236,612 10s. 0d.
The total amount loaned to the company is £16,000.
There will be Government liability under the option agreement which provides that in the event of the Minister deciding to avail of his power under the operation agreement to terminate his obligation under the latter agreement to supply cattle to the company he shall pay to the promoters by way of liquidated damages and not as a penalty such sum as shall be determined in accordance with the terms of the option agreement as follows: —
(a) should such determination take place within 12 calendar months from the date on which the abattoir and factory of the company commenced operations, the sum of £5,000 together with the sum of £5,000 or such other sum as may be subscribed as capital in and to be expended by the company upon the erection and equipment of buildings. Should the promoters find it necessary to expend more than £5,000 in addition to the sum of £16,000 to be advanced by the Minister, the Minister shall be notified and unless he is satisfied that the additional expenditure is necessary he shall be under no liability to refund the surplus should he give notice of intention to discontinue the supply of cattle.
(b) should such determination take place within 24 calendar months
(i) a sum equal to 75 per cent. of the net profits earned by the company in its first year working and
(ii) such sum subscribed as capital as aforesaid not exceeding £5,000.
(c) should such determination take place within 36 calendar months,
(i) a sum equal to 50 per cent. of one year's net profits to the company on the average of the two years' working; and
(ii) such sum subscribed as aforesaid as capital not exceeding £5,000;
(d) should such determination take place within 48 calendar months,
(i) a sum equal to 25 per cent. of one year's net profits to the company on the average of the three years' working; and
(ii) such sum subscribed as capital as aforesaid not exceeding £5,000.
Should the Minister determine the agreement four years from the date of commencement of operations of the company, it is provided that he shall have the option to purchase from the promoters all the issued shares in the company upon the basis of the fair value of the shares, including the amount standing to credit of the Debenture Reserve Fund, plus one year's profits of the company on the average of four years' working. Should the Minister fail to exercise this option within the period of two months after the audited accounts of the company had been made available to him, the promoters shall have the option to purchase from the Minister the debenture at a price to be ascertained as follows: —
(a) if the amount standing to credit of the Debenture Reserve Fund is two-thirds or more than two-thirds of the amount advanced by the Minister, the price shall be 100 per cent. of the face value of the debenture, and the amount of the Debenture Reserve Fund shall be paid to the promoters by the company;
(b) if the amount standing to the credit of the Debenture Reserve Fund be less than two-thirds of the amount advanced by the Minister, the price shall be a sum equivalent to the Reserve Fund, plus 50 per cent. of the sum by which the Minister's advance exceeds the amount of the Reserve Fund, and the amount of the Debenture Reserve Fund shall be paid to the promoters by the company.
In addition to the Government liability referred to, the only other liability which will arise is in respect of the extension to the factory, which took place towards the end of the year 1935. At that time it was found that the number of animals dealt with in the factory was not sufficient to cope with the numbers available, and the company were asked to extend the factory and plant with a view to dealing with up to 2,000 cows weekly. The company agreed to extend the factory provided the Minister would make a further advance of £12,000. It was also tentatively agreed to supply between 1,500 and 1,800 cows per week when the extensions were completed and the necessary agreements drawn up. Before this took place, however, conditions in the cattle trade improved very considerably, and the situation as regards an excessive number of old cows coming forward for disposal was completely changed. In the circumstances it was decided to revert to the original rate of progress, namely, 800 to 1,000 per week. As the company had undertaken the additional expenditure in extending their premises, and as this additional accommodation and plant were not availed of owing to the impracticability of supplying the increased number of cattle contemplated, the company were entitled to compensation for the additional expenditure incurred. The amount of the compensation which the company will be entitled to for these reasons is at present under examination.
After allowance for depreciation, the total value of the company's premises and plant, inclusive of the extension, as shown by the audited accounts of the company dated 30 July, 1937, is £53,969 12s. 11d.
The Minister stated that £236,612 was paid for cattle for this factory. Might I ask whether the statement made by a director of the concern that the cattle supplied were worth little or nothing is correct?
If it adds anything to the statement of the director, I said exactly the same thing when the scheme was going through. I was asked by Deputy Holohan what were these old cows worth, and I said they were worth nothing.
Is the Minister not aware that the skins of 100,000 cows would be worth something in the region of £100,000?
The Deputy should go into this business himself.
Could the Minister tell us what the profits of this firm were during the two or three years the factory was in operation?
I have not that information with me.
Was the firm not under an obligation to inform the Minister each year what its profits were?
Yes.
But the Minister, making this full statement and keeping nothing back, did not bring with him any statement of what the profits were?
I have answered everything very fully. Everybody admits that.
Is it not apparent that it is difficult to assess the exact amount of the Government's liability with regard to this matter when we are told that the liability consists of 75 per cent. of the profits, or are 50 per cent. of the profits, plus £5,000, plus a share of £53,000, when we do not know what the profits are?
If I am asked what they are——
Did the giving of the cows mean the giving of the skins free?
We did not take the skins off them before they were sent into the factory.
Mr. Morrissey
You took off the skins of the calves all right.
They took the skin off you.
Has this not proved a very profitable scheme for the farmers from the point of view of getting rid of redundant old cows and providing the farmers with cheap meat meal for their live stock?
Yes.