Deputy Madeleine Taylor-Quinn requested permission this morning, and indeed yesterday, to raise on the Adjournment the closure of the Kilrush Pottery. After Question Time today Deputy Brendan Daly sought permission to raise the same matter on the Adjournment. The Chair thought the reasonable thing to do was to allow both Deputies to raise the matter on the Adjournment. As Deputy Taylor-Quinn requested permission to move it yesterday and again today I propose calling on her first. I do not know whether the Deputies have got together and made any arrangement but I think the reasonable arrangement would be to split the time. I am suggesting that; I cannot enforce it. Deputy Taylor-Quinn.
Adjournment Debate. - Kilrush Pottery Closure.
On a point of order, you will be aware, Sir that I have had a question on the Order Paper in relation to this company since Easter and that because of the fact that circumstances changed in the concern involved in the last day or two I sought permission to raise this matter on the Adjournment. It is, in my view, a precedent for the Chair to adopt this stance and I should like to find out under what Standing Order or by what precedent this decision has been arrived at.
It is matter entirely at my discretion. If there are a number of matters sought to be raised on the Adjournment and they are all qualified, the Chair decides which will be allowed. It is also a matter at the discretion of the Chair, if a number of people seek to raise a matter on the Adjournment, which of them he will allow. In this case I would have been perfectly justified in allowing Deputy Taylor-Quinn alone to raise the matter because she requested it yesterday and again this morning. Deputy Daly did not request permission until after Question Time today. I thought the reasonable and equitable thing to do was to allow both Deputies a bite of the cherry and I suggest that they get on with it. Deputy Taylor-Quinn.
I welcome the opportunity of raising this matter on the Adjournment and I agree to give to Deputy Daly ten minutes of the time allocated to me. I am not happy that the matter has arisen. It is very unfortunate for the south west Clare area that there are 105 jobs at serious risk. In 1961 a group of very enthusiastic Clare businessmen, with a group of German businessmen, set up a pottery plant in Kilrush. That was extremely successful. There was great hope at the time in the south west Clare area because at that stage the Kilrush pottery factory was seen as something that would replace the emigrant boat to England and America. It operated very successfully and in 1976 it was taken over by Rosenthal. Between 1979 and 1981 the number of workers was reduced from 110 to 60. Problems arose in the factory. At the time a study was done and it was found out that part of the reason for the failure then was that the plant was not re-equipped with modern machinery, that there was an inability on the part of the plant to manufacture the type of product that was being produced previously in the traditional style and indeed there were very serious promotional and marketing defects. There was also a lack of commitment and management from the German plant and that affected the work force in Kilrush.
In 1981 the IDA arranged a further takeover. It was taken over at the beginning of 1982 by a consortium of UK businessmen. This got off to a bad start because there were very serious problems in relation to leasing. The result was that delays were experienced by the group who were taking over. However, they overcame those and after a few months in production their output increased by over 300 per cent. They had order books which were full right through the year 1982 and up to the end of March 1983. Unfortunately, they again started to experience some difficulties and finally Fóir Teoranta sent in a receiver. The receiver made his report last Monday. It is not too optimistic. The Minister could be of great help and I hope he will be in a position to request the Minister for Finance to ask Fóir Teoranta at once to direct the receiver to commence operations there immediately. From talks I have had with the receiver I know that there are still many people in Britain who have substantial orders with the company and are still prepared to accept them. They are waiting for the stuff to come from Kilrush and it is up to us to get it out there. While orders stand we have a duty to see that the supplies are forwarded. The problem can be met by the receiver going in immediately and managing the company while a takeover is being negotiated. When the receiver visited London a week and a half ago he was quite impressed with the reaction he got from the people who had ordered from the factory previously.
From inquiries I have made with the IDA I gather that about 15 inquiries in all have been made and 15 brochures have been sent out to interested parties. Of those interested parties four or five seem to be very serious and two of those have in fact visited the factory. The IDA must be directed to pursue with vigour the serious inquiries that are being made by interested companies.
South-west Clare is an agricultural area. It has experienced very little industry. A loss of 105 jobs there would have very serious social and economic repercussions. There could be serious social repercussions affecting the fibre of society. There could be serious economic repercussions for the towns of Kilkee and Kilrush and the villages of Kilmihil, Cooraclare, Doonbeg and Carrigaholt. The next largest employer is 30 miles east in Ennis and 70 miles north in Galway. This factory is the largest employer for 70 miles along the west coast of Clare and for 30 miles east. We cannot allow the loss of those 105 jobs. It is important that action be taken. Redundancy payments plus social welfare payments that would be made from the Exchequer in the future would take up very quickly the amount of money necessary. There is a very good and skilled work force there, a work force that has co-operated in every way with the management and with the receiver and has foregone various rises. We in Government must show our commitment to them.
I am glad to get the opportunity to contribute to this debate and to raise the question of the future prospects of Kilrush Pottery. This company has been known for its outstanding performance, producing first quality products. It has a highly skilled work force dedicated and committed to the ceramics industry. Everyone in the Kilrush area and throughout the west Clare peninsula has expressed grave concern for the workers and their families. Many of the work force were young, in their first jobs, but several employees had been with the company since its establishment. Concern and anxiety have been expressed by the various organisations in the area, the Kilrush UDC, the Kilrush Chamber of Commerce and the Kilrush Development Association, as well as many other organisations associated with the town. The news of the closure comes as a major disappointment in the entire west Clare region.
I will refer briefly to some of the unsatisfactory circumstances associated with the closure. During Easter, an indication was given that there would be an extension of the holidays. There was a complete failure to clear the air locally and this led to speculation and rumours because of lack of communication of information as to what the situation was. Various statements were made, many of which could not be substantiated. Very little information came from the company and those involved in its operation. That can often happen but I was gravely disappointed that one of the State agencies involved, Fóir Teoranta, were not more forthcoming. They should have made the work force and their families more fully aware of what was happening rather than have the unsatisfactory situation developing over three or four weeks.
The impact of the closure will be disastrous for Kilrush. As I said during the debate on the SFADCo Bill the closure of the company with a loss of 110 jobs is equivalent to a loss of 10,000 jobs in Dublin and one can imagine the protests and demands that would be made if that happened in this city.
This project could be made viable in the long term if action were taken by the State agencies Fóir Teoranta, the IDA and SFADCo. SFADCo owned the plant and they, in conjunction with other State agencies such as the Youth Employment Agency and AnCO, should intervene. It is now necessary, under the aegis of the county development team, to prepare an emergency scheme to back up the receiver and to enable him to run this project as a viable proposition and to get the people who have been made redundant back to work. They are all skilled operatives and there is a demand for the product they have been producting — the order books are full. That has been checked out with the companies whom they supplied. With the financial backing of Fóir Teoranta it should be possible to keep this project going until a new industry has been found for Kilrush. With small investment and the completion of the new plant which has already been installed in the factory, and with the addition of some new modern equipment it is possible to run the factory as a viable propostion. It may not be possible to reemploy all of the work force, but employment could be found for between 80 and 90 people. It would be a mistake and indeed a shame if the State agencies did not make an effort to support the factory until a new industry can be got to purchase the undertaking.
The receiver has been most helpful since he took up his position. He has got the wholehearted co-operation of the workers, something which has not been forthcoming elsewhere. The receiver has indicated that a number of companies are interested in the project but the best prospect of selling to new people would be by keeping the operation in production as a going concern. It would be tragic if the receiver had to continue to dismantle the plant and to sell it off. If that situation were to come about it would be most difficult to get anyone to take over the plant. If the IDA were to finance the bringing of a local industry into the town the cost would be enormous. As it stands, the undertaking is not viable but it can be made viable with a small investment so that the industry will be kept as a going concern. The amount of money that would be required to keep production going would not be large by comparison with the good it would do for the entire area.
There is also the social aspect. In Kilrush there are a number of advance factories already unoccupied and it is almost impossible to get existing industries to expand. Taking into account the vast social implications for the area of this closure, the Government should act immediately to provide the necessary finance for the receiver. If necessary, a workers' co-operative could be established there with the help of Fóir Teoranta and the other development agencies. I know the Minister will be meeting a deputation of local interests during the week and I appeal to him to ensure that the financial backing will be there to enable the plant to be re-opened.
Even at this witching hour of midnight I am glad of the opportunity to reply to this important debate. I share the concern expressed by Deputy Taylor and Deputy Daly about this problem in the Kilrush and surrounding areas. My Department fully appreciate the employment that company have given for over 20 years in that area. Deputies can be assured that I will do everthing to ensure the continuation of the Kilrush Pottery in a new form at least.
The company have weathered four storms and unfortunately this is the second time in the last three years that they have been in difficulties. In the late seventies the company began to make losses and the owners, Rosenthal AG who owned the company since 1966, made the decision to withdraw. The IDA took an immediate interest and succeeded in having the enterprise taken over by new investors — a consortium of UK business interests — early in 1982. At that time it appeared that the takeover was successful. However, the early prospect of an increase in trading was not justified. The increased trading never materialised although initially it appeared to do so, and the reason was the serious contraction of the market as a result of the recession.
The drop in the market led to an over-capacity in many plants making competing products, especially in England. In the second half of 1982 the IDA, in conjunction with Fóir Teoranta, took further steps to ensure the company were put on a sound financial footing. These efforts included a substantial loan from Fóir Teoranta of £150,000 which was made in January 1983. At that point it seemed the position had again stabilised but unfortunately, due to the continuing weakness in the market demand, it led to further serious losses.
Once again the IDA and Fóir Teoranta examined the situation, but upon advice they received they were forced to conclude that the company as constituted was not viable. On 27 April last a receiver was appointed at the request of Fóir Teoranta. Fóir Teoranta are not the responsibility of the Minister for Industry and Energy, but of the Minister for Finance, but neither Minister is in a what they can or cannot do. They are a statutory body established to act independently and must make their own decisions.
Needless to say, Fóir Teoranta did not appoint a receiver lightly and took the decision only as a last resort. It is unfortunate that the financial position of the company is such that the receiver has been unable to continue production at the factory. The IDA in conjunction with the receiver, are actively trying to find a new investor to take over the assets of the company and to resume production at the plant. In the present difficult international climate I must add that this will not be an easy task because we are in the grips of a serious recession.
I understand two possible investors have already come forward, but discussions with them are at a very early stage, and I am precluded from making any statement as to the likely outcome of the negotiations. The IDA will do everything they can to ensure a take-over of the plant and Fóir Teoranta — who have a special remit with regard to employment in areas around the country — will be associated if possible with the take-over. It is a fact that the receiver has no money to ensure continued production but that does not in any way damage the future prospects of the company. The appointment of a receiver may make the way clear for the resumption of production under new ownership. I would not like to say what would be the outcome of the negotiations, which are at an initial stage, but the action the receiver has taken will not damage the prospects of a takeover by a new company.
Is the Minister hopeful?
I am sure Deputy Reynolds is as hopeful as I am.
In Stoke-on-Trent there is——
I was very blunt in my reply and admitted there had been a collapse of demand in England and this had led to a number of closures and low capacity in the industry.
That should make a little room in the market.
Let us hope so, and let us hope that this Government and the action of our agents, the IDA and Fóir Teoranta, will ensure that a package can be put together for a new investor to take over the plant and assets and resume production in Kilrush.
I fully appreciate the concern expressed by the Deputies. As Deputy Reynolds knows, the Department of Industry and Energy are not lacking in their commitment to provide funds for rescue operations, in particular where there are major structural problems involved regarding employment. Every effort will be made by the IDA and Fóir Teoranta to ensure that the funds required for a successful take-over will be made available.
Down the years both the IDA and particularly Fóir Teoranta have not been lacking in providing funds for the company. It was Fóir Teoranta who provided the last major loan of £150,000 in January 1983. That indicates their concern for the continuation of that company. Every Deputy can be assured that this matter will be kept under continual review. As Deputy Daly mentioned, I am receiving a deputation in regard to this factory in a couple of days.
We are all concerned about the decrease in employment levels, particularly in rural areas, and we appreciate the significance of a factory closure. Hopefully, with the goodwill of everybody concerned, especially the workers, we will be able to find a new investor and get production going again in Kilrush. This is our prime objective and I can assure Deputies that no effort will be spared by this Government to ensure a successful take-over of the company.