Vol. 474 No. 3
21 Mr. Deasy asked the Minister for Enterprise and Employment if he is concerned at the decrease in the numbers working in the clothing manufacturing industry; the plans, if any, he has to reverse this trend; and the numbers employed in the industry in each of the years 1965, 1975, 1985 and 1995. [2904/97].
Details of the numbers employed in the clothing manufacturing industry in respect of the end of year periods requested by the Deputy are as follows: 1965, 23,000; 1975, 21,100; 1985, 16,300; 1995, 13,700
The considerable drop in employment since 1965 is naturally very disappointing. It must be recognised, however, that the clothing sector has undergone enormous changes and major restructuring over the past 30 years. Clothing manufacturers in Ireland, in common with clothing manufacturers in other member states in the European Union, have incurred serious casualties arising from the rationalisation of the sector.
The clothing sector has always been, and continues to be very labour intensive. However, the ethos and structure of the industry have changed radically over the years. This was imperative to survive in a constantly changing climate. The sector has had to cope with both dramatic and traumatic changes. These include the effects of Ireland's accession into the EC, high inflation during the 1970's which led to substantial pay increases, completion of the internal market, increasing liberalisation of trade, currency fluctuations and changing market demands. The competition from low cost supplier countries in Central and Eastern Europe and the Far East in particular, has posed a major problem for the sector.
The clothing industry, when faced with these challenges recognised that it had to undergo a radical restructuring process if it were to survive and remain a dynamic force in Irish manufacturing. It was widely accepted that the key to the sector's future was in its ability to become competitive. Unfortunately, not all clothing manufacturers survived the changes in the competitive environment and some were forced out of business with a consequential loss of jobs. The sector, however, has made great strides in its restructuring drive. A substantial number of manufacturers have moved away from traditional manufacturing methods in favour of quality and a quick response to customers' needs. The introduction of world class manufacturing, new design technology and improved training measures have aided the sector in its competitive drive and helped many firms to secure a niche in the market which is less vulnerable to competition from low priced European and Asian exports.
My Department and the industrial development agencies have made concerted efforts to encourage the sector to reorganise and rationalise. A number of initiatives have been put in place over the past few years. During 1993-4 the sector benefited significantly from a specific research and development measure and a special FÁS training support scheme.
The Deputy may be aware that in May 1996, I launched a major initiative specifically for the clothing sector aimed at improving competitiveness and thereby increasing profitability in individual companies. This initiative resulted from a co-ordinated approach by Forbairt, the Irish Clothing Manufacturers Federation, other industry representative bodies and my Department. It represents a highly significant and realistic effort to facilitate the process of building strong clothing companies capable of competing on both domestic and international markets thereby reducing the incidence of company closures and associated job losses.
The main element of the initiative is the competitive improvement programme which will enable companies which meet the relevant criteria to implement specific business plans and action programmes. This programme has been devised for the clothing sector as part of the EU funded CHANGE Programme which is designed to assist companies in traditional sectors of industry to adjust to competition.
As well as benefiting under these various initiatives, the sector has also availed of other EU funded schemes in recent years, particularly under the RETEX programme. While this is a horizontal measure aimed at reducing the dependency of particular regions on the clothing and textile sectors, some of the measures are appropriate in facilitating the necessary adjustment of commercially viable textile and clothing firms.
These initiatives are regarded as the best way forward. The Government's commitment to address the issue of cost competitiveness which is vital for the future of the sector has been reflected in the last two budgets. There has been substantial reform of both employers and employees PRSI, as well as a reduction in the income tax take. These existing initiatives are designed to enable Irish clothing companies to overcome the intensity of competitive pressures and, combined with the full support of Government and the development agencies, it is hoped the industry can secure a long-term viable future.
I would have preferred to have question No. 26 answered, but that is the luck of the draw. I appreciate that because of our membership of the European Union traditional industries such as the clothing industry and the car assembly industry were bound to suffer — we were told that in advance. I tabled the question as a result of an interview I heard with a member of the clothing industry last week who pointed out that he finds it very difficult to compete with Far Eastern manufacturers. Has the Minister a specific strategy in mind to combat the problem of low cost imports?
The issue of low cost imports has been negotiated in the context of the GATT. We are in the process of reforming the multi-fibre agreements over the period to the year 2005, which will see a progressive opening up of European markets. That is an inevitable development which is part of our world trade commitment. In that context the approach taken by the federation and the industry interests together with Forbairt, of concentrating on areas where they can improve the competitiveness of the industry by improving technology and computer aided design and getting into niches where they can withstand competitive pressures, is the only way forward. There are vibrant and thriving sectors within the industry which demonstrate that strategy succeeds.
Coming from a constituency that has suffered badly in terms of the clothing manufacturing industry, with the loss of jobs in Sunbeam and other companies, I would like the Minister to give the total annual value of the domestic market for clothing. What percentage of that market is catered for by Irish-owned companies?
I do not have those figures available to me at present but, from memory, only about 20 per cent of the Irish industry is supplied locally.
I did not hear the figure for 1965.
It was 23,000.
There was almost a 100 per cent decrease in the number employed in the industry, from 23,000 to 13,000, in the 30 years from 1965 to 1995. In regard to the recent closure of Farah clothing company, what efforts were made to prevent that closure?
That is an entirely different question I would like to answer with briefing available. Following the difficulties in Galway the company took a decision to consolidate its activities in Kiltimagh. It is in the process of moving machinery to Kiltimagh and is currently taking on employees following recovery from the fire and other events. The Kiltimagh factory is now building up employment again.
Does the Minister agree the clothing industry is especially vulnerable to the punt-sterling exchange rate? What is the Government doing on that front?
The clothing industry has had to meet a number of challenges, one of which has been currency fluctuations, but that is by no means the major issue. The greatest issue has been lower cost production from Asia, Eastern Europe and elsewhere. In that context it is necessary to concentrate on quality design and building up strong products in competitive niches.
What percentage of the Irish market is supplied from outside the European Union, particularly from Far Eastern countries? The textile industry is experiencing problems as a result of imports from other countries and no corrective action is being taken.
Deputy Wallace asked a similar question and I do not have the information available, but the figure is in the order of 80 per cent.
Written Answers follow Adjournment Debate.
