Dáil Éireann debate -
Thursday, 31 May 2001

Vol. 537 No. 4

Adjournment Debate. - Research Funding.

Mr. Kenny

I welcome the Minister of State with responsibility for science and technology, Deputy Treacy. The Volex Interconnect Systems limited plant is located on Breaffy Road in Castlebar. It was built in the past few years and cost more than £8 million. It has been a good employer in Castlebar since it was first sited there by the Cable Products company, making computer terminal connections.

I visited the factory recently following the lay-off of a number of short-term contract workers to express my concerns to the managing director and members of the workforce. It is obvious that the computer industry is subject to international pressures from competitive elements. It is necessary that skills be upgraded, that research and development take place and that we move on to new niche markets in specialist areas.

I understand from the managing director of Volex Interconnect that the company intends to make the Castlebar plant their global research and development centre and that the company is planning to move into fibreoptic communications. The Minister of State, Deputy Treacy, knows that both technological companies and call centres operating from the west are severely disadvantaged by a lack of capacity. The fibreoptic cable which will be manufactured in Castlebar has the range and capacity to take all calls made in Ireland at any given time. It is ironic that a plant manufacturing such a product, and that will be shifting the emphasis of its workforce to do so, is limited by a lack of capacity, as are other plants in the west. I am sure the Minister of State will deal with this in his reply.

Volex Interconnect applied for a specialist research and development grant which has been processed for over 12 months without coming to fruition. That should not be the case. The Minister for Enterprise, Trade and Employment said in a recent Dáil reply that Ireland will continue to be at the leading competitive edge and that the Government will do whatever is necessary to ensure we remain there. The Government and the State agencies should support the company given that it has spent money on a new plant, intends to make an Irish location its centre of research and development and plans to transfer its workforce into a new area of competition.

I express my concern about this sensitive issue to the Minister of State. Although it has been agreed with unions, it is worrying that 130 workers are on short-term work. The company, union and workforce involved are all made up of good people. I invite the Minister of State to visit the plant at his leisure so he can see the pristine laboratories that are waiting for research and development to begin. I hope the grant application made by the company will be processed favourably and quickly. If the Minister of State has time in the next four or five weeks, he should go to Castlebar to see what the company manufactures and to assure workers that the Department of Enterprise, Trade and Employment and the rest of the Government will assist and encourage them to continue to be a leading edge company in the technological area. The workers will be delighted to hear such an assurance from a Minister of State responsible for science and technology.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

Volex Group plc is a public company quoted on the London Stock Exchange which designs, manufactures and markets a wide range of interconnect-cable assemblies to original equipment manufacturers globally. Volex's customers include the world's leading electrical and electronic manufacturers. The company is a global supplier with manufacturing facilities in Ireland, the UK, Croatia, Estonia, USA, Canada, Mexico, Indonesia, Malaysia, Singapore and China. More than 10,000 people are employed in the group.

The Irish operation is Volex Limited in Castlebar which was established as Cable Products in 1987, a manufacturer of cable assemblies. Its original focus was on targeting local customers in the IT hardware sector. As the IT hardware industry developed, Volex refocused on the networking-server and telecommunications segment of the IT industry. Castlebar is the headquarters for Volex Europe.

Due to recent fall in demand because of the turbulence in the telecommunications and networking industries and a slow-down in the installation of third generation telecommunication equipment, the company has been experiencing a reduction in orders from the telecommunications sector. This is not just a local issue but an international problem. As a result, yesterday 30 May 2001, the company put 100 people on short-term working for approximately one month.

The company experiences increases and decreases in demand for its product from time to time and the recent short-term working is a normal reaction to changes in the pattern of demand for its product. Volex Limited has delivered a strong financial performance in recent years. While currently the whole group is experiencing a softened market, it is anticipated that when the market recovers strong growth will return.

There are a number of positive developments in relation to employment in County Mayo in recent years. IDA Ireland has had significant success in attracting new projects to the county. In 1998, Lionbridge Technologies established its European software test centre in Ballina and currently employs 51 permanent employees. In 2000, Dekko Heating Technologies established its European manufacturing operation at Bunree Industrial Estate and at full production will create 80 jobs. Coca-Cola has completed the construction and commissioning of its facility in Ballina which employs 178 people. In 2000, the German company, Schutz, established an industrial packaging manufacturing operation at the Asahi facility in Killala to supply the needs of Coca-Cola and other customers in Ireland. It will provide 25 new jobs at full production.

In 1999, the Cedar Group plc, a UK company, established a call centre in Castlebar. The centre already employs 61 people. They have also established a software development centre in Castlebar which employs 56 software developers.

Over the past 18 months IDA Ireland has radically changed its policies with the aim of delivering half of all new green field jobs into Objective 1 regions, which include Mayo, in the coming years. This involves doubling the proportion of green field jobs negotiated for these regions. In 2000, 50% of all jobs negotiated by IDA Ireland during the year in green field investment projects were secured for Objective 1 regions.

The processing of a research and development grant is a day to day matter between the company and IDA Ireland. However, I understand that IDA Ireland responded directly on the matter to the Deputy on 18 May last. As Minister of State responsible for science, technology and commerce and for research, technological development and innovation, I can tell the House that we have put £2 billion into our national development plan for these areas of activity. We want to create world class research centres in information communications technology and biotechnology. With our corporation tax and the investment environment in Ireland, and the highest rate of return in the modern world for international companies, we warmly welcome this application for a grant from this company. If the company wants to communicate directly with me on the matter, I will be delighted to assist it in collaborating on behalf of the company with this application. The Deputy can be certain that IDA Ireland will give this a definitive response as quickly as possible.