Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 26 Jun 2001

Vol. 539 No. 1

Adjournment Debate. - Job Losses.

I regret that the Minister is not present to reply. That is no reflection on the Ministers of State present. While I appreciate their presence, I would prefer to see the Minister.

Yesterday morning on their way to work the Meenmore, Dungloe employees of Arramara were shocked to hear the news that the factory was to close with the loss of 12 jobs. While the news was devastating, the method of its delivery was cruel in the extreme. The Minister for the Marine and Natural Resources issued the diktat from his constituency the previous night without reference to the board of Arramara Teo., the employees or anyone else. The arrogance was breathtaking. No meetings were held, no advice sought, no soundings taken, no alternatives considered: it was just a fait accompli. Is that the proper way to treat workers who have given many years of loyalty to a company?

My criticism of the Minister's handling of this debacle is not just political. There has been widespread criticism of his actions by members of his own party. Human beings should be treated with more courtesy, sympathy, respect and understanding than the Minister was prepared to give.

Arramara is a long established company. It was founded in 1947 in Galway and in 1968 in Dungloe. It is based on a natural renewable resource, seaweed, and is unique in that the Minister is the majority shareholder, owning 51% of the company. The balance is held by ISP Alginates, a company based in Scotland. The company directly employs 34 staff and up to 400 other people involved in seasonal seaweed harvesting along the western seaboard. I estimate that 200 of those part-time workers will be affected by the closure of the Dungloe plant. The company returned a small profit almost every year and paid a dividend to shareholders until recent times but no money was ever invested in improving facilities, marketing or research and development. This is certainly not the case with many of its sister semi-State companies which receive huge amounts of cash annually.

Arramara provided a social service to communities along the west coast, particularly when alternative employment was difficult to find. The number affected in Donegal will be 12 full-time employees, around 200 part-time or seasonal harvesters and a haulage contractor who invested in specially adapted lorries to load and transport seaweed. Many local engineering companies, garages and shops will also see a drop in their turnover. A whole community will be affected.

It is significant that under the Minister's restructuring plan all surviving operations will be relocated in Kilkieran, the Galway centre. This seems to be the Minister's own decision made without reference to the board. It has all the appearances of being a political decision or an exercise in keeping his own constituents happy at the expense of the Donegal workers. Decisions with such social and economic consequences should not be taken in the name of political expediency. Can the Minister of State inform us of the plans for the future of the Meenmore facility? Will it be maintained for future production purposes or are there plans to sell it to help finance the Kilkieran facility? The workers are anxious, and entitled, to know. What does the future hold for the 200 seaweed harvesters who will, in all probability, lose a valuable source of income? Can they expect compensation or redundancy? They have made a massive contribution in difficult conditions to Arramara. Are they also to be consigned to the economic scrapheap?

Even at this late stage these valuable jobs can be saved. There is a demand for such a product and the expertise is there. A joint approach by the Minister and Údarás na Gaeltachta – I am delighted to see the Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands here – should be initiated. A capital injection may be sufficient to safeguard the livelihoods of the Donegal families depending on the continuation of Arramara.

Mar fhocal scoir, drochscéal é seo don Clochán Liath agus don cheantar Gaeltachta i dTír Chonaill. Tá súil agam nach é sin deireadh an scéal agus go ndéanfar rud éigin chun na postanna seo a chaoimhniú san am atá romhainn.

Ba mhaith liom ar an gcéad dul síos mo bhuíochas a ghabháil don Teachta for raising this very important issue. I met a number of delegations about this matter today and I spoke on it earlier in the Seanad. As a person from a coastal community I am very conscious of the difficulties mentioned by Deputy McGinley and others who have raised this issue. The Minister confirmed in a statement yesterday that Arramara Teoranta is to be restructured in order to restore its long-term viability and develop the business into the future. Discussions on the financial restructuring package are ongoing between the shareholders and when concluded formal announcements by the company are expected to follow in the next few weeks.

I apologise for the Minister, who is out of the country on State business. He has been in contact with me today to assure those who raised the issue that he will be working as hard as he can to ensure the 12 people involved are accommodated in whatever way is possible.

Arramara Teoranta was established in 1947 to produce seaweed meal for use in the alginate industry. Alginates have a wide variety of applications ranging from use in food and animal feed production to the pharmaceutical industry. The Minister for the Marine and Natural Resources holds 51% of the shares in Arramara Teo. on behalf of the Government. ISP Alginates (UK) Ltd, formerly Kelco, hold the remaining 49% of the issued shares. Called up share capital stands at £77,000. The company operates two plants. Its main base is at Kilkieran, Connemara, and it operates a second plant at Meenmore, Dungloe, County Donegal. The company employs 34 people in total with up to 400 people traditionally engaged in seasonal seaweed harvesting along the coast from Malin Head to Loop Head. Much of the seaweed currently being processed in Meenmore is now collected from Mayo.

Due to downturns in the global alginate market, combined with increased competition from Chile, China and other countries, Arramara Teo. has experienced trading difficulties which have accelerated in the past 12 months. ISP, which throughout has been Arramara's main customer, has reduced its annual purchases of weed from 6,500 tonnes in 1997 to just 2,000 tonnes in 2001. Third party sales have been developed from a very low base in the mid-1990s to 3,000 tonnes in 2000. Losses of £108,215 were incurred in 1999 and losses of £174,799 last year.

A business review of the company's prospects was commissioned by my Department in consultation with the other shareholder and the company. The independent economic consultants recommended the business can be restored to viability if operations are restructured on the basis of relocation of all production to Arramara's Connemara plant which can fully service expected product demand. This is in line with the company's conclusion that this rationalisation is essential. This restructuring is expected to entail the closure and sale by the company of the facility at Meenmore, County Donegal. There are 12 permanent employees and three temporary staff at Meenmore.

I emphasise again that discussions are ongoing between the shareholders and the company's bank on financing of the proposed restructuring which will require funding of £350,000. When a satisfactory financial agreement is concluded the company will take the necessary formal decisions in relation to the Meenmore closure and company rationalisation, consult the staff and proceed with negotiations on a fair and reasonable package. In that context the Minister has confirmed that he will give high priority to the possible scope for development of alternative projects at Meenmore in consultation with all relevant interests. I discussed this with the Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands and she is very keen, from a political point of view as well as on behalf of Donegal, that something is done. She is to have a round of formal talks with those concerned.

Rationalisation is fundamental to restoring the viability of the company at this time and to securing its future. In this regard the Minister has Government agreement to negotiate the best possible funding package which will reposition the company on a solid footing and enable it to develop into the future. Legislation will be brought forward to underpin any funding decision on foot of a satisfactory agreement being concluded.

The Dáil adjourned at 10.50 p.m. until 10.30 a.m. on Wednesday, 27 June 2001.

Top
Share