Dáil Éireann debate -
Wednesday, 2 Mar 1994

Vol. 439 No. 6

Adjournment Debate. - Proposed Closure of Kilkenny Company.

Mr. Hogan

Thank you for the opportunity to raise the matter of the proposed closure of Universal Cladding, Kilkenny, which will directly affect the 30 people employed there. This company is probably the first in the series of creditors of Mahon McPhillips that has gone into arrears and liquidation. It is a sad day for this company as it is for the closure of any company. This company has been involved for some time in industrial roofing contracts, it has strong links with the UK where it has carried out extensive work and developed a good reputation in the business.

A creditors' meeting has been called for Friday next at which co-operation will be required by creditors regarding outstanding liabilities. It is remarkable that Allied Irish Banks is the financial institution involved as approximately £200,000 is owed by Mahon McPhillips to the company. I would have thought the financial institution involved in the Kentz Corporation and with Universal Cladding would have acted less swiftly in this instance and would have co-operated with the company to see if it could trade itself out of difficulties, particularly as the Kentz Corporation is under examinership.

A matter that caused grave concern to the company and contributed enormously to the fact that it has gone into liquidation is the high cost of insurance. The managing director informed me today that he received a quotation of £78,000 for employers' liability and public liability insurance on a turnover of £1.5 million. A quotation for similar business in the UK would be £8,000 which gives an indication of the extent of the uncompetitiveness of this company when it has to compete with UK companies in Dublin for very important contracts. Apart from the bad debts incurred by the company and the difficulties with the financial institutions other matters have led to the downfall of this company, namely, insurance. I appeal to the Minister to exhort the IDA and his Department to ensure that this company is investigated as soon as possible with a view to saving jobs and contracts.

Mr. Browne

(Carlow-Kilkenny): I ask the Minister of State to come to the rescue of this company and save jobs. Money will be spent travelling throughout the world and advertising Ireland as a place to which to bring industry. Setting up new jobs would cost far more. This successful company is the victim of circumstances outside its control. Mahon McPhilips may be a victim also but the difficulties in the Kentz Corporation is having a ripple effect. I ask the Minister to use the IDA and to negotiate with the banks with a view to keeping this company in operation and to maintain employment where it exists. I could repeat much of what has been said by my colleague but there is no need. I look forward to a positive reply.

Minister of State at the Department of Enterprise and Employment (Mr. S. Brennan)

I understand that Universal Cladding Systems Limited is an industrial roofing contracting company which was established in 1985. The company has not received grant assistance or had direct contact with my Department or the State agencies under its aegis. Notwithstanding that I am conscious of the importance of the employment afforded by this company and the consequences of any job losses to the local economy. I appreciate the Deputy's concern about this company whose problems I understand are linked to difficulties at the Kentz Corporation at present in examinership. The final report of the examiner appointed by the High Court on the future viability of the Kentz group is awaited. Deputies will appreciate that payments to Kentz suppliers and subcontractors, such as Universal Cladding are a matter for the examiner and it would not be appropriate for me to intervene in such circumstances.

As Deputies are no doubt aware, Universal Cladding is one of a group of three companies, the other being QEF Limited and Universal MSP and I am assured that the problems at Universal Cladding will not have any adverse effect on the other two companies in the group.

I understand the point about insurance made by Deputy Hogan and I propose to bring forward reforms in that area. I agree with the Deputy about those statistics. They are unacceptable and I know the Deputy and his party will consider my proposals to tackle them, when I bring them forward.

Last Friday the Minster for Enterprise and Employment, Deputy Quinn, announced a major new industry for Kilkenny, namely HIS Incorporated of New York, to establish a quality jeans manufacturing facility which will create 460 new jobs over the next two years. While this announcement will not directly impact on the company we are discussing here, it reflects ongoing commitment to job creation in the region. I have no doubt that the obvious attractions of Kilkenny will succeed in bringing further investment to that region in the future and I will certainly spare no effort to do so.