Dáil Éireann debate -
Thursday, 10 Apr 1997

Vol. 477 No. 4

Adjournment Debate. - Newtowngore (Leitrim) Sawmill.

Mr. Ellis

I wish to share my time with Deputy Brendan Smith.

I want to thank the Chair for giving me the opportunity to raise the fact that 70 people employed at A. S. Richardson and Company, which is part of the Balcas group in County Leitrim, have been put on short time.

The reason I raised this with the Minister for Enterprise and Employment is that I could not raise the main substance of the issue with the Minister for Agriculture, who is the Minister who has responsibility for Coillte. The problem, as stated by the company when these layoffs took place ten days ago, is that they were facing difficulties with regard to supply of timber. As a result they were being forced to put people on short time. I understand this is not the only company involved in timber processing that has been forced to put people on short time because of lack of supply of raw material.

It would appear that there has been no co-ordination with regard to supply and demand in the sawmilling and timber processing industry over the past 18 months or two years. It is apparent that there has been overselling by Coillte of the basic raw material which is necessary for the sawmilling industry, and this has led to short-time working at this plant and at others. I hope the Minister for Enterprise and Employment will be in a position, in conjunction with the Minister for Agriculture, to talk to Coillte and arrange for an ongoing supply of sawlogs at a competitive price.

The net result of this shortage is that market share will be lost and jobs will be lost if there is not a supply of raw material for this industry. We are now finding that this industry is competing against similar product coming, especially in the UK market, from Scotland and, in some cases, from Scandinavian countries. The need to protect these jobs in what is seen as one our major industries for the future is of paramount importance.

I appeal to the Minister for Health, who is here on behalf of his colleague, to relate back to both his colleagues the problems being experienced in this industry because of a new tendering process that has been put in place by Coillte. It is not much good if Coillte sells next year's timber or the timber for the year 2000 during this year in order to keep its balance sheet looking well if the net result is job losses in the timber industry down the road.

Mr. B. Smith

I thank Deputy Ellis for sharing his time with me. My interest in this small sawmilling plant is that many of my constituents, particularly in the west Cavan area, are employed in A. S. Richardson and Company in Newtowngore, County Leitrim. As Deputy Ellis said, this sawmilling plant is part of the Balcas group. It is a source of major concern to the local community that the 70 employees have been put on short time working. Deputy Ellis rightly pointed out that the scarce supply of timber is the immediate reason those people have been put on short time working. There is a need for Coillte to have a proper supply and demand policy. I was disappointed the Minister for Agriculture, Food and Forestry did not reply to my parliamentary question in which I asked him to request Coillte to establish a policy that would ensure a continual supply of timber so that employment in sawmilling plants is safeguarded. There is much forestry in the Cavan-Leitrim area and the least we should expect from those forestry developments is downstream processing activity.

Many of my constituents have enjoyed permanent and gainful employment in the A. S. Richardson plant in Newtowngore for many years. Those who visited me at my clinics last weekend and spoke to me on the phone are concerned about the need to safeguard their employment in the long-term. I wholeheartedly support the views outlined succinctly by Deputy Ellis.

Mr. Noonan

(Limerick East): I thank both Deputies for their contributions on this matter. A. S. Richardson has been an important employer in Newtowngore for many years. The 1970s and 1980s saw considerable expansion in the company. In 1995 it was acquired by Balcas Limited, sawmillers with headquarters at Enniskillen. Balcas has sawmilling facilities at Enniskillen and Magherafelt, County Derry. The company also has a plant at Kill, County Kildare, engaged in secondary processing of medium density fibreboard, which it purchased from Medite in Clonmel, County Tipperary.

The sawmilling sector is suffering from over-capacity which is driving up the price of sawlog. The difficulties for the mills are aggravated further by recent declines in the market for sawmill residues and a drop in prices which have been provoked by falls in the international market for paper and pulp. I understand that in the circumstances Balcas management has decided that the most prudent decision is to cut back production at all its plants. The effect on A. S. Richardson will be that 51 of the 68 workers will be on a three day week for a temporary period. The company hopes to be able to resume full time working in three to four months if raw material supplies and market conditions improve.

The issue of sawlog supply and price is being addressed through a new sales system based on fortnightly electronic auctions which came into operation in January 1997. This has the approval of Coillte and the Irish Timber Council, the umbrella body for sawmillers. I understand this new system is experiencing teething problems but the industry is confident that when these have been resolved the system will work efficiently. There is currently evidence of a degree of rationalisation in the industry which will relieve the pressure on scarce raw material supplies. The imminent start-up of the Masonite plant near Drumsna, County Leitrim, will produce significant new demand for sawmill residues. I understand that A. S. Richardson has negotiated a contract with Masonite in this regard.

Forbairt is engaged in a programme encouraging and supporting sawmilling companies to initiate new product development and diversification projects in an effort to ensure the future growth of the sector. It is monitoring the position at A. S. Richardson and will assist the company in any way it can.