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Dáil Éireann debate -
Wednesday, 6 Nov 1946

Vol. 103 No. 2

Committee on Finance. - Industrial Alcohol Bill, 1946—Second Stage.

I move that the Bill be now read a Second Time. The origins of this Bill are to be found, first, in the need, which became obvious during the emergency, of having available to the Government a commercial organisation which could experiment with and, if considered desirable, undertake the manufacture of chemicals which are essential to various industrial processes and the production of which has not been and is not likely to be undertaken by private enterprise; secondly, in the problem of transferring to a more suitable organisation the manufacture of explosives and of other chemicals used in the production of matches, which was carried on during the war by the Department of Defence in collaboration with the Emergency Scientific Research Bureau; thirdly, in the desirability of facilitating the Industrial Alcohol Company in extending its own productive activities, as a result of experience gained during the war.

The need for a manufacturing organisation which might interest itself in the production of industrial chemicals will not, I am sure, be disputed. There are many chemicals used in industry which are not now produced in this country, which are essential to the industries concerned and the war-time scarcities of which added greatly to our difficulties. Because of the smallness of our home market relative to the capital cost involved in their manufacture, it is unlikely that private enterprise will be interested in their production. In some cases, at least, production on a satisfactory price basis would not be possible unless supported by special measures or carried by some more profitable lines undertaken by the same producer. The Government thinks it desirable to have a suitable organisation to investigate the practicability of manufacturing industrial chemicals here. The establishment of the Industrial Research Institute will ensure that the scientific problems involved can be properly examined, but after the scientific aspect of manufacture has been investigated the commercial practicability will still require study. In regard to chemicals, it is intended that the work should be entrusted to the Industrial Alcohol Company, when reconstituted with new functions, as is proposed in this Bill.

In consequence of the changed functions, the title of the company will also be changed. Henceforth, instead of the rather cumbersome title "Monarchana Alcóil na hÉireann, Teoranta" it will be known as "Ceimicí, Teoranta". I do not wish to convey that any particular programme is in mind or that the company will embark immediately upon activities in connection with the manufacture of chemicals. There are, of course, certain possibilities in view, but they are not at the present time more than possibilities. One of these is sulphate of ammonia. Some members of the Dáil will remember that we went a long way towards getting sulphate of ammonia manufactured here before the war. In fact, the completion of the plans which were made was prevented only by the outbreak of hostilities. It is certainly the desire of the Government that the matter should be taken up again and it is intended that the work will be entrusted to Ceimicí, Teoranta. Before the war, the examination of the plans for the establishment of the sulphate of ammonia industry was entrusted to an inter-departmental committee. It was not a satisfactory instrument. The members of the committee were officers who were fully occupied with other duties and the commercial negotiations which were involved proceeded, therefore, very slowly. It is considered that the reexamination of the matter in the post-war situation can best be done by a commercial organisation which might itself be entrusted with the task of undertaking the establishment of the industry.

During the war, the factory operated by the Department of Defence, in collaboration with the Emergency Scientific Research Bureau, produced potassium chlorate, phosphorous and phosphorous sesquisulphide, which were required either by the Army or for the production of matches. The practicability of that production was amply demonstrated, but the costs, particularly under the conditions in which the Department of Defence had to operate, had no relation to the prices at which those chemicals are ordinarily available through commercial channels. The practicability of continuing on a commercial basis some or all of the processes carried on by the Army during the war in the post-war era will also be investigated by the company. It will be appreciated by Deputies that the decision to use this company is prompted solely by the suitability of its organisation for the purpose and the desire not to add to the number of commercial undertakings operating under Government authority.

The sole purpose of this Bill is to alter the objects of the company so as to permit it to undertake new responsibilities, should it be so decided, and to make certain other changes consequential thereon. It is not proposed to alter the capital of the company by this Bill or to make any additional financial provision for extending its activities. Under the original Act, the maximum amount which the Minister for Finance can invest in the shares of the company is £500,000. The issued capital of the company is £275,763. The granting of a licence to the company to undertake a new form of manufacture, if it should require that additional capital above the limit now fixed in the principal Act must be provided from the Exchequer, must also involve fresh legislation so that the Dáil will have a full opportunity of discussing the proposal. The main immediate effect of the Bill will be to empower the company to begin investigations and to spend money on such investigations out of its revenues which it could not do under its existing powers. During the war the company, in addition to supplying petrol distributors with power alcohol, was able to supply undenatured alcohol to laboratories, hospitals and industrialists who found it impossible to obtain continued supplies of imported alcohol for their purposes. Experience has shown that there is a demand for a highly rectified spirit more suitable to such purposes, and it has been decided to install at the Cooley distillery additional equipment for the production of very pure neutral spirit to meet that existing demand. However, some doubt has been raised as to the power of the company under the principal Act to sell alcohol to any person other than a petrol distributor. Section 9 of this Bill is intended to remove that doubt.

Deputies will have observed that provisions of the usual kind are included in the Bill to ensure that, as far as possible, Ceimicí, Teoranta, in any of its future manufacturing activities will not come into competition with private enterprise, and that no licence to engage in the manufacture of any commodity may be granted to it until the intention to do so has been published, and until the Minister for Industry and Commerce is satisfied that the commodity is not being, and will not be adequately manufactured by private concerns. In view of the possibility that the publication of intention to license the company to undertake a particular form of manufacture may lead to exceptional imports of the commodity in question, which might prejudice the success of the industry, power is taken to the Government to apply a quantitative limitation to imports in such circumstances. Ordinarily, it will be the policy of the Government to leave the field clear for private enterprise in this industry.

If, however, economic production is practicable only on a monopoly basis it will be agreed that there is a case for entrusting it to a State owned concern. In the products in which the company will be mainly interested, it is likely that either economic production will not be possible at all while other considerations may prompt its undertaking and some special form of State support may be needed, or else, as in the case of sulphate of ammonia, the capital required would be so substantial that it would not in our circumstances be forthcoming from private sources unless the position of the undertaking was secured by legislation.

I do not wish the Dáil to think, however, that in passing this Bill it is committing itself to approval of whatever propositions may be subsequently submitted at the instance of Ceimicí, Teoranta. Each such proposition will be considered on its merits, and any large-scale proposition which may emerge from its investigations and receive the approval of the Government requiring the provision of additional capital will be possible only if fresh legislation is introduced. The sole immediate purpose of the Bill is to enable the company to devote money from its present revenues to investigation of the commercial possibilities in various chemical fields. I had contemplated that the company would undertake that investigation after the war but found that there was a legal difficulty arising out of the terms of the principal Act which precluded the company spending any money on such a purpose. The passage of the Bill will permit of the expenditure of money by the company on these investigations.

If these investigations lead to the possibility of the company extending into new fields of chemical manufacture then the procedure laid down in the Bill will be followed to ensure that the field which it proposes to enter is not likely to be covered by private concerns and if it involves substantial capital outlay the position is left that the Dáil must be consulted by means of a new Bill to provide that capital. The enactment of this measure, therefore, cannot by itself produce any substantial change. It will make available to the Government an organisation which is ideally suited to supplement the work of the Industrial Research Council by investigating the commercial practicability of any proposition which the Industrial Research Institute proves to be technically possible. For that reason, I think it is desirable that this Bill should be passed and that the reconstituted company should have these further functions which it is now proposed to give them.

The Minister has spoken of the company spending money out of its revenues. What are the revenues of the company, and can he say whether the company has paid any dividends on its capital as it is at present?

The gross trading profit in the year ending on the 30th September, 1945, was £14,343. It varied from £57,900 in 1942 to as low as £9,400 in 1943. Deputies will appreciate that the activities of the company in the manufacture of power alcohol were entirely conditioned in the war years by the supply of raw materials.

Would the Minister say what the output was and the price charged?

The price charged was 7/6 per gallon.

And the output?

The output has varied very considerably because it was entirely conditioned by the supply of materials. The company has been using potatoes but did not use potatoes in times of scarcity.

And it is going to use treacle now.

It used molasses before the war.

We have listened to a very strange contribution from the Minister. While one might look askance at the Bill as it was presented to us, I do not see how anybody could support it at all after the statement which we have just heard. The Minister asks for authority to change the powers of the Industrial Alcohol Company so that it can indulge in a certain amount of research with regard to the commercial manufacture and distribution of a certain number of chemicals. I do not know whether it is the intention that the new company will go ahead with the production of sulphate of ammonia and other phosphates.

To go ahead with the consideration of the commercial practicability of undertaking their manufacture.

The Minister left us under the impression that this work need not necessarily be undertaken by the company at all but that there are some unspecified chemicals which the Minister did not care to mention on which they might work. Generally, he created the impression that he wanted this machinery but that he had no idea of what it was going to be used for, that it might be used for some purpose connected with the investigation of some chemical or with the commercial manufacture of some chemical. It would be bad enough to set up a separate company for the purpose that the Minister has mentioned, but to ask us to graft it on to the framework of a company with the history of the Industrial Alcohol Company is, I think, asking the Dáil far too much. When the Government venture into the manufacture of industrial alcohol was first discussed here, the Minister was very emphatic that it would turn out alcohol at 1/9 to 1/10 per gallon. Both Deputy McGilligan and myself put forward certain arguments, basing them on certain calculations the accuracy of which the Minister was not prepared to admit. In reviewing the matter when the Industrial Alcohol (No. 2) Bill was before the House on the 20th July, 1938, the debate being reported in column 901, I recalled the fact that on the 25th February, according to the Parliamentary Debates, column 2146, when we were discussing the price at which industrial alcohol was going to be sold, the Minister said:

"The price at which we contemplate that industrial alcohol will be available ... will not in our opinion, exceed 1/9 and 1/10."

I also recalled that, in subsequently discussing the matter on the 29th May, the Minister, as reported at column 1997 when his estimate of 1/10 was again under discussion, said:

"As I was listening to Deputy Mulcahy and Deputy Dockrell trying to prove that this alcohol was going to cost anything up to 3/- a gallon, it just occurred to me that possibly when they were going to school mathematics was an optional subject. They did not succeed in proving anything like what they set out to prove."

Actually the arguments which we put forward when the Minister was beginning his experiments in this particular matter, have been perfectly justified by the operations of the company. The Minister's whole attitude in regard to the production of alcohol at the time was that it should develop a war-time industry but it did not function during the war.

It did function.

It functioned to the extent to which materials were available. The materials required were to a large extent potatoes. The Minister's forecast, prophecies, and arguments to us were that it was an industry for which we might have to pay through the nose in peace-time but that it was going to be of very great service in war-time. Now, the Minister is going to extend for peace-time purposes the operations of that particular company. He is going to use some of the revenue that is accruing to it by charging 7/6 per gallon for alcohol for industrial purposes, money squeezed out of the users of industrial alcohol at an exorbitant price, for further experiments. The experiments are likely to be along the line of the experiment carried out in the Department of Defence during the war. Deputy McGilligan, I think, has already given some very revealing and suggestive accounts of the experiments carried out by the Department of Defence during the war. I do not think there was anything in these accounts that would suggest that we should allow the Industrial Alcohol Company to proceed in the same way without very clearly understanding what they were going to do.

The Minister asks us to accept these proposals in regard to the company by suggesting that anything that may be done by the company in future will come up here for review later and that, if any more money is required, we shall have to vote it here. But the fact is that this Bill will give the Industrial Alcohol Company power to use some of the revenue it has at the moment on experiments of this kind. I think we might consider, in this connection, the approach to matters of a much bigger nature in Great Britain and consider what the British Government are doing in connection with work related to the development of, say, atomic energy. The British Government has not set up a special company. It has given to companies that already exist there and to the universities, special sections of work connected with the development and use of atomic energy. I should like to know why some of our universities or why some of the commercial chemical companies that are in existence here, are not used by the Government in order to get this work done. The suggestion that access to certain chemicals that may be required for industrial or other purposes here, because the Minister thinks they should be experimented on by this company, should be denied to companies that want them here is not a very justifiable proposition at this hour of the day. Instead of availing of the machinery that would increase the price of the necessary chemicals for industrial firms here on the one hand, or reduce, on the other hand, the supply of these chemicals for ordinary commercial firms, these firms should be induced to go ahead in their own private way with the developments of these products. As the matter stands at the moment, I am very much opposed to the Bill and the explanation which the Minister has given has only served to strengthen my opposition.

I move the adjournment of the debate.

Debate adjourned.