With the approval of the House, a Cheann Comhairle, I shall share my time with my constituency colleague, Deputy Sheehan.
Adjournment Debate. - Dunmanway (Cork) Factory.
Is that proposal satisfactory? Agreed.
The Molnlycke factory in Dunmanway in south-west Cork is the biggest industrial employer in west Cork and has a workforce of 250. Thus, the announcement last weekend that the factory is to reduce that workforce by more than half is a devastating blow to the entire area. Already the jobless total in south west Cork is at its highest level since the foundation of the State. We can ill-afford to lose such a significant number of industrial jobs on top of the existing record levels of unemployment.
The impact is, of course, especially felt in Dunmanway town and district, where the people were already trying to come to terms with the closure last month of another small factory in the town and the letting go of a number of employees in a factory in the nearby village of Enniskean.
The Molnlycke factory was established in the town of Dunmanway in 1975 and experienced two large expansions in the eighties. It is part of the Swedish group which employs 10,900 people worldwide and has manufacturing units in 15 countries, with a turnover of more than £1 billion. It is a major operation internationally. This multinational company blame the cutbacks in Dunmanway on the European recession. That may be a very small part of their operation, but the consequence of this decision is despair in many households in the Dunmanway area where couples are striving to make ends meet and are now wondering how they can meet their mortgage repayments.
The Government have a responsibility to our area which they have not discharged. The first act on coming into office in 1987 was to axe the £15 million west Cork package put in place by the previous Fine Gael-Labour Government. Since then no industrial project of consequence has been established in south-west Cork and clearly we figure very low on the priority list of the present administration. I demand, for whatever remains of the term of this Government, that top priority be given to south-west Cork in the location of new industrial jobs. Unless this commitment is given and acted upon the continuing haemorrhage of emigration and unemployment will be seen as the only plan which this Government have for west Cork. We have a crisis at local level in relation to unemployment. I do not want to hear from the Minister, by way of excuse, about the national situation. The unemployment figures in south-west Cork are worse than the national figures and the present situation will make it even worse. I should like to know whether this Government have any response, any ray of hope, that will give confidence to our people in south-west Cork that they care one whit for the plight of our people there.
I thank my colleague, Deputy O'Keeffe, for allowing me time to speak on this very important matter. I join with him and call on the Minister for Industry and Commerce to seek an immediate meeting with the management of Molnlycke Limited to ascertain if the restructuring programme in their Dunmanway factory, where over 50 per cent of the workforce have been made redundant, will be carried out in the manufacturing units in the other 14 countries throughout the world where they are established. They boast of employing 10,654 outside this country with a turnover of over £1 billion. Is Ireland the only country where they are winding down their operations?
The Irish factory was grant aided generously by the IDA. On that ground the Minister should request them to withdraw this hasty and premature action and to weather the competition storm which they fear they will encounter in the surgical gown market in Europe and throughout the world. Competition is the life of trade. Surely they owe something more to this country than winding down operations in this manner.
I call on the Minister to take immediate action with that company to ascertain whether they will implement that policy in the other 14 countries throughout the world in which they operate. If not, he should have another look at the Dunmanway company to ensure that they maintain their workforce, because south-west Cork is a job starved constituency. A setback such as this is highly detrimental to the morale of the constituency.
First, I should like to apologise for the absence of the Minister for Industry and Commerce. The Minister was aware that Molnlycke Limited announced on Friday a restructuring of its Irish factory in Dunmanway which will have the effect of reducing by 126 its workforce of 246. The situation is at an early stage and discussions have just started with employee representatives on the company's rationalisation plan.
Molnlycke Limited, originally Steritex Ltd, was established in 1974 and started operations in Dunmanway in 1975, producing plastic medical disposables — surgical gowns, caps and drapes. It is part of the Clinical Products Division of Molnlycke AB, Sweden, which is in turn part of the giant Swedish forest group SCA. The company underwent major expansions in the years 1985, 1987 and 1990. These projects were assisted by the IDA. Over the past two years the parent company has invested over IR£1 million in new equipment. The Dunmanway factory today produces an extensive range of disposable surgical drapes.
Management told staff on Friday that the announcement was a reflection of the European recession and the market conditions Molnlycke are facing for their disposable surgical drapes and gowns business in Europe. Competition from Far Eastern products has greatly affected the company in their European markets. The Irish operation is now going to concentrate on the manufacture of surgical drapes. The company remain optimistic that the restructuring will strengthen their competitiveness in future years, but at the same time they are actively developing new products. The new products, while having a very positive initial reaction, have not so far succeeded in making a significant impact on a highly competitive market but are confidently expected to do so at some stage.
The IDA met with the company on Friday, 23 October 1992 to discuss the rationalisation plans. The company have had no option in the face of severe competition from Far Eastern products but to reduce the workforce at their Irish operation in Dunmanway. As the Deputy is no doubt aware, the Minister has no direct responsibility for the action of the Swedish parent company or indeed any other firm in the running of its business.
I understand from the IDA that discussions are continuing with Molnlycke with a view to getting the company to manufacture new products at its Dunmanway facility. Other steps being taken to assist the south-west Cork area include actively marketing a 24,000 sq. ft. facility in Bantry, which is 12 miles from Dunmanway. This facility has been visited by three overseas companies in the last six to eight weeks. All overseas officers are fully aware of the availability of factory space and the advantages of the area.
Three 3,000 sq. ft. units are being actively promoted in Skibereen, which is 16 miles from Dunmanway. These units are primarily suited for start-ups and indigenous industry. The south-west Cork area is being marketed as an entity. As a number of Molynlycke workers live in the surrounding towns of Bantry, Skibereen and Bandon as well as Dunmanway and its hinterland, they may find alternative employment as a result of these efforts.
The Minister of State must be joking.
In summary, the Minister is conscious of the employment situation in the south-west Cork area and of the impact of the job losses at Molynlycke on the Dunmanway area in particular. I can assure the Deputy that the IDA will continue their strenuous efforts to locate new industries in the area which, as previously stated, is being marketed as an entity. While support agencies play an important part in assisting industrial development and expansion, much depends on the external trading environment. It is regrettable that at this time the European recession, coupled with intense competition from Far East products, has led to this unfortunate job loss situation in Dunmanway.