I move:
That, in view of its importance to the national forestry programme and to the saw mill industry and its employment implications for the nation, Dáil Éireann calls on the Government to implement the development plan for Chipboard Products Ltd., Scarriff, already prepared by the company and meanwhile, to ensure that the commercial operation of the company is no longer prevented.
The decision taken after consultations between the Bank of Ireland, the Minister and the Government that a receiver be appointed to Chipboard Products Limited, Scarriff, will go down in history as one of the most treacherous acts of desertion in relation to our own raw material resources and our people that has ever been perpetrated by an Irish Government. It will rank as one of the most short-sighted, retrograde and irresponsible decisions ever taken by an Irish administration. The Government have sold out on Scarriff and on the people of east Clare. They have turned their backs on the timber industry and abandoned the hopes and ambitions of hundreds of people who saw their future in the development of Irish forestry resources and products. It may put a temporary end to Chipboard Limited in Scarriff but it will not be forgotten in County Clare and elsewhere that a Government in such a callous, uncaring and deliberate way, in the name of financial rectitude, left a ghost in Scarriff which will haunt the timber industry for generations.
The Marine Port and General Workers Union issued a statement on the matter on 24 November as follows:
On behalf of the executive committee of the Marine Port and General Workers Union we wish to state publicly our utter condemnation and rejection of the action of the Government in removing its financial support from the only chipboard factory in the State, thereby jeopardising the livelihood of almost 200 members of the union with its inevitable effect on their families and indeed on the whole community at Scarriff and the surrounding district. This callous and unfeeling decision is all the more incomprehensible when it is realised that in recent months due to the efforts of the reconstituted management and particularly due to the responsible attitude of the workers in accepting a lengthy pay pause and minimal wage increases the factory has achieved a substantial increase in productivity and viability. Even more incomprehensible to us is the fact that such a decision should be made by a Government which is composed by members of the Labour Party who by their very constitution one would expect to firmly reject and oppose a policy based on cold expediency at the expense of the dignity and human rights of the workers. This union will never cease to fight with every means in their power to safeguard the rights of their members in Scarriff and it calls on every member of the trade union movement to give them their unqualified support in achieving this aim.
Those words of Séamus Redmond, the general secretary of the union, describe in a fitting way the anger, frustration and annoyance not only of the workers in Scarriff but of people throughout County Clare.
It is difficult to understand the reasoning behind this incredible decision. The scant statement of six or seven sentences issued by the Government Information Services is poor compensation for the many people employed in the industry in Scarriff and the surrounding forests. It is poor compensation for the effort, endeavour and financial commitment made by workers, management and others in the area to ensure that with Government assistance the company would be established. It is apparent to anyone that the Government did not consider the matter fully. It is equally obvious that the decision to cut off support was taken in the context of the Estimates. We must ask the Government to reconsider and look again at the Forestry Estimate and ask whether the small saving of about £600,000 which will ensue as a result of this decision justifies the misery, hardship, frustration and anger which will be caused for so many people, as well as the knock-on effect in the region and throughout the saw milling industry.
Almost 50 per cent of the timber which goes to a sawmill is disposed of by way of waste or residue. An outlet must be available in order to make viable the operations of both large and small sawmills. In Mountshannon there is a small sawmill employing 25 people where the income from waste disposal through chipboard is valued at about £100,000 a year. The loss of that income to this small industry will put at risk the jobs of those working there and cause financial problems for the company. This affects not only the Mountshannon plant but a series of plants who were supplying their residues to Chipboard Limited. These sawmills are scattered not only throughout County Clare at Mountshannon and Kilrush but as far away as Bunclody, Longford, Mullingar, Banagher, Mountrath, Tuam, Woodford, Loughrea and Ballinrobe. Already concern has been voiced by the sawmillers' association who recognise that there is no longer an outlet for their waste.
If the necessary equipment is to be installed in those plants, the de-barking machinery which is essential, investments of £100,000 will have to be made in each plant. Such investment will be necessary if those plants are to be made viable. Since the closure of the Scarriff factory there has been a knock-on effect throughout the saw-milling industry which will send other concerns rushing to the IDA, and other agencies, seeking financial aid to instal the machinery which is essential if those concerns are to have any outlet for their waste material.
It is likely that in the event of that machinery being installed the high quality chip which will then be available will be exported by the companies concerned because there is not, and will not be, an outlet for it. That material will be manufactured into chipboard abroad and imported by us at a cost of between £20 million and £30 million. Does any Member know of anything so daft or outrageous?
I should like to give some of the history of the Scarriff factory, why it was established by Fianna Fáil, why it was considered desirable to support it and why it is essential that the chipboard industry is supported in the future. The Forest and Wildlife Service, in conjunction with the IDA, have consistently followed a policy of orderly development of the wood processing and wood using industry bearing in mind the availability of supplies and resources. Since the fifties a series of forecasts have been circulated indicating, nationally and regionally, the returns which will be available by way of timber resources in future years. It has been estimated that timber output will double in this decade and increase by four times in the nineties. It is expected that we will reach a total timber output of 3 million cubic metres by the year 2,000. Those forecasts are available for inspection.
A factor which emerged in the late seventies was that the growth rate of forests planted in the late fifties was significantly higher than earlier forecasts indicated. A policy decision had been arrived at that by reducing the age of clear felling in rotation in the bulk of forest crops there would be a remarkable increase in the timber resources which would become available, particularly for the saw-log industry. While it was expected that substantial amounts of saw-log and pulp wood would become available those two factors meant that there would be a significant increase in the availability of pulp wood in this decade and in the nineties. In the light of those changing circumstances the Forestry Division, and the IDA, embarked on an intensive study to identify the measures required to use the available resources to the maximum capacity so that the return to the economy by way of finance and job opportunities could be maximised. The study on developing the Irish timber industry for the eighties, carried out in consultation with the Forest and Wildlife Service was published by the IDA in July 1981 and it was on the basis of that study that the plans to develop the chipboard industry in Scarriff were undertaken.
The development plans for Scarriff were undertaken on the detailed forecasts and information contained in the 1981 study. That report indicated the projections for future output from State plantations, the best method of exploiting them in terms of financial return and job potential. It has been estimated that up to £400 million has been invested in the last 50 years by far-sighted planners and politicians who recognised the need to buy and plant land so that we would have sufficient raw material to meet the ever-increasing demand for wood and wood products. It is an indication of confidence and commitment that successive Fianna Fáil Governments, and other Governments, had in the timber industry that this investment was undertaken. The forest development plan was carefully executed and it is a scandal that the work carried on in those years is being replaced by cowardice and defeatism by the Government who have knocked at every opportunity any proposals to develop our own resources. The Government are running away from the challenge identified in the IDA study and are not prepared to make the necessary financial commitment so that we can exploit the investments made by successive Governments in the last 50 years.
There were certain problems in the saw-milling industry and they were identified in the late seventies. Many of the factories had serious problems. The IDA, in co-operation with Fóir Teoranta, commissioned A.D. Little of London in the late seventies to study the board and chipboard industries, to look at all aspects such as production facilities, operating costs, markets, product quality, financial viability, competitiveness and advise on future development and the formulation of strategy. A detailed study was carried out of the Scarriff plant. The IDA report on the study of the internationally recognised consultants, A. D. Little, stated:
As a result of these studies A. D. Little concluded that: Particleboard was an eminently suitable product for manufacture in Ireland. Chipboard Limited Scarriff had the plant and product range to form the nucleus of a healthy Irish particleboard industry. New investment would be required. A strong new parent company would bring definite benefits.
The London consultants also examined a plant similar to the Scarriff concern, Munster Chipboard. The various proposals put forward were examined including one to run the two plants together in order to cut down expenses. Those plans fell through. However, it was recognised that the Scarriff plant had the product range and their manpower levels seemed adequate. The marketing strategy was also adequate. The financial performance was examined and comparisons were made in relation to the manufacture of chipboard and distribution costs of companies in the UK, Sweden, Finland, Austria, and Germany. Not alone did they examine the whole structure of the industries at that time, management, manpower levels and so on, but they also examined the availability of timber and concluded that the plant did have the potential of a sound chipboard industry. It was on that basis alone — at the time when Chipboard were in financial difficulties — recognising the potential of Scarriff, recognising its importance from the point of view of forestry development, the Government decided to invest in Scarriff, to form a partnership with local communities there. They so decided in the best interests not alone of the timber industry but in the whole development of afforestation in the future that they should embark upon a project in Chipboard Products Limited in Scarriff. That was the reasoning behind and the background to the establishment of the chipboard factory at Scarriff.
The Minister seems to base strongly part of his argument for his decision not to support the chipboard industry on the recommendations of another consultancy undertaken at a later stage. I think the Minister will agree with me that the study later undertaken — and which now forms the basis for his argument that Scarriff is not a viable proposition — examined Scarriff on the basis of whether it was a commercially viable operation and on no other basis whatsoever. For example, such study did not take into account the problems which arose through lack of outlets for forestry products, the importance of having an outlet for forestry thinnings, the social impact of the closure of a plant such as that at Scarriff, with its repercussions throughout the entire region, of east Clare in particular and its effect on saw-mills there.
I deplore in the strongest possible way here this evening the selected leakage of passages from that document, done deliberately by somebody, to undermine the efforts being made and at present engaged in by the action committee at Scarriff to find an alternative solution to the problem obtaining there. The most damaging sections of that report, which should be the direct responsibility of the Minister for Forestry, were leaked by a journalist in a Sunday newspaper. I challenge the Minister to state clearly in this debate from what section of his Department that information was supplied, how it came to be available to a newspaper journalist and why it was that selective and damaging statements only were taken from it and published rather than the whole report which the journalist claimed to have in his possession. It was obvious that the report was leaked with the intention of effecting the maximum amount of damage to any prospect of a reopening of the Scarriff plant. I want the Minister to explain now to the House how that report came into the hands of a newspaper journalist and why it was that those damaging sections only were published. It is obvious that they were selectively given in order to do maximum damage to the plant.
I want to revert to the establishment of the chipboard factory, to get the facts right behind the reasoning for its establishment. When the company went into receivership in 1980 efforts were made to attract overseas investors and developers who might be interested in taking over the plant. A number of groups visited the plant at that time. But, as is now known, there were enormous problems being encountered in the industry not alone here but throughout Europe generally. There was the problem of reduced demand, over capacity in the industry, reduced profitability and other problems affecting the European scene as well. Mergers were taking place, sawmills were going out of business, new technology and restructuring were on the way. At that time it was not possible to attract new investment from abroad. Recognising that it was not possible to attract new investment from abroad the Government rightly at that time set up this company with the support, help, assistance and indeed the financial backing of some local people. It is important to note here that many people in Scarriff, within the community itself — small shopkeepers and so on — and indeed many of the work force employed at that time — invested their money and savings. They did so knowing that they were going into a venture 64 per cent Government-owned. Many people would not have invested at that time were it not for the fact that they understood they were going into a company which was 64 per cent Government-owned and in which there was some security for them. They were prepared to place the whole of their life savings in this venture at a time when there were difficulties being encountered in the timber industry generally, mainly because they recognised the need to maintain the plant there, that they were secure in their investment in the knowledge that the Government was with them in support of that project. They are now being shamefully treated by the Government, who pull the plug, leaving them high and dry without any prospect of any return on their investment in the company since its formation.
I want to speak for a few moments about the importance of the thinning operation. If there is to be properly developed afforestation here it is vital that we have constructive and forward planning in regard to the thinnings programme. Equally it is recognised that there will be created major forestry problems unless such thinnings process is proceeded with. This is especially important here because so many of our plantations are young and in need of the thinning process if afforestation is to be developed to its maximum potential. I do not disagree with the Minister when he contends that the national forestry programme permits some flexibility of the thinnings programme. When replying to the Private Notice Question I had down here on the eve of the closure of the plant the Minister did not seem to be unduly perturbed about the fact that the thinnings process would not be undertaken, or that it might be delayed or postponed. I feel the Minister is under-estimating its importance. He must be aware that failure to thin our forests over a protracted period will have a detrimental effect on the whole of the timber industry.
Now that this Government have closed the Scarriff plant there is the grave possibility that the whole of our forestry development will be damaged by the delaying of the thinnings process, or of the failure to thin adequately. Are we to see a reversion to the days when Irish timber was exported £1 a ton from Water-ford and other ports with all the scandal and annoyance that fact created, with all the confusion there was then nationally throughout the industry? Then we had questions here day after day as to why it was, at a time when we were importing timber to the tune of £400 million to £500 million a year, which we could successfully grow at home, we were exporting ours at £1 a ton to be processed abroad, thereby creating jobs abroad. Yet timber was being imported here at enormous cost to this State, with people recognising that this was a lunatic policy being pursued. If we are to revert to that kind of situation I do not share the complacency of the Minister in regard to the thinning process. If for this one reason alone, in order to provide an outlet for forestry thinnings and ensure the properly planned development of afforestation the expenditure involved in keeping the Scarriff plant open for our thinnings is justified. But they have been slowed down for various reasons, above all, because of cutbacks being effected in the Minister's Department. This thinnings process must be undertaken more rapidly, particularly because there is not now any outlet for them. By being kept open Scarriff would provide such outlet. For this reason the expenditure about which we talk would be justified.
It was also anticipated that when the plant was planned for Clonmel, when the Medford Corporation came there, that the western European market for the medium-density board which they would produce there, when in full operation, would increase substantially to something like 1 million cubic metres by 1985.
Can anyone say if the markets for medite have expanded to that extent? Is it not a fact that the markets throughout Europe are suffering from the special effects of the recession and that the planned output to meet the anticipated need for medite products otherwise would be enormous and would take up to 400,000 cubic feet of timber for a year's supply? Will that type of development take place? Is it not a fact that already similar plants have been established throughout Europe to cater for the anticipated demand there, and that it is likely the output from medite would not be to the extent anticipated? It had been anticipated that 400,000 cubic feet of timber would be required per year to supply the demands for medite. Is it not likely this will be needed in the future?
We must bear in mind that when medite was planned there were pulpwood outputs in Munster, Clondalkin, Scarriff and Athy which were using in the region of 250,000 cubic feet of timber every year and that when the decision was made to support medite an assurance was given that the operation in Clonmel would not affect the wood supply that would be available to the existing plants? It must now be questioned whether there is need not only for one but for two chipboard plants here, thus processing the amount of pulpwood available, thus creating significant job opportunities if we were to use the residue available from small sawmills throughout the country and thus producing the financial turnover available.
I will deal briefly with the financial position in the Scarriff plant. It would be fair to say that the claims and counterclaims of the past few days have genuinely confused people about the real situation in regard to CPL. One thing is undeniable, that the financial injection which was part of the plan for the Scarriff plant was never made. The energy saving machinery, the investment needed to improve quality, the other essential plant equipment necessary in order to make the plant profitable and to enable the business to secure the markets that were available were not provided. The financial investment which was part of the original recommendation for the establishment of the plant was never made. There were reasons for that.
The company were established in 1981. As a young company they experienced financial difficulties at the outset and were endeavouring to tighten up their managerial structure and their work force in other areas in order to make their chances of viability greater and the undertaking more economic. The workers made a determined effort to help, through working substantially longer hours and by working harder. However, they were left without financial resources and could not themselves raise the money needed to buy the machinery which they wanted. Over a year attempts were made by the Government to find people to build up the company with them, who would strengthen their marketing strategy, who would reinforce their technology and find new financial support for them. Various attempts were made to bring in international companies involved in similar operations — a joint venture operation to realise the potential of the Scarriff plant.
After some discussion with them the Minister decided that he could not see any further benefit in continuing the discussions and, after talks with the bank he decided to appoint a receiver and close the plant. I find it strange now that the Minister can say to us that he is looking at the possibility of getting some alternative foreign investment to restructure the plant and establish a viable chipboard industry in Ireland. In the circumstances, how can the Minister expect any international company to come in to build up a chipboard industry when the Government, a 64 per cent owner in the industry, opt out? In these circumstances can anyone expect an international company to come here to establish a chipboard industry when the Government opt out? Is it not strange to find an Irish Government calling for help from firms in Germany or Spain when they do not have the courage or the initiative or the commitment to do something themselves?
I should like to refer to the board of management of this company and in particular to the chairman, Ambrose McInerney, who deserves our gratitude. His commitment to Scarriff has never failed: he stood by Scarriff no matter how difficult the circumstances were. He acted honourably and courageously. The other board members put their energy and efforts into CPL in the national interest at a time when they could have been engaged more profitably in other directions. We owe them a great debt of gratitude.
In making their announcement through the GIS, the Government showed indecent haste and it was an indication of the way in which the Government have been treating many Irish businesses. It showed their lack of interest in getting Irish business to invest in Irish companies and to build up Irish industry so that we can utilise our own resources. If this is the way they will continue to operate I can see little hope of getting anyone to support Irish industry in the future.
Finally, I appeal to Fine Gael Deputies from my constituency who will be voting on this issue tomorrow night to realise that they cannot sit on the fence any longer in regard to this matter. They cannot sign resolutions calling for special meetings of the county council to discuss the issue and at the same time refuse to vote with us on this motion. I ask the Government to reconsider their foolishness and to support the Scarriff industry, to re-open the chipboard plant, to provide the timber for it, put back the electricity and the telephones and to get the plant into production to provide jobs and a financial return to our economy.
