Dáil Éireann debate -
Tuesday, 26 Mar 2002

Vol. 551 No. 2

Written Answers. - Job Creation.

David Stanton

Question:

107 Mr. Stanton asked the Tánaiste and Minister for Enterprise, Trade and Employment the action taken by Ministers, her Department or State agencies to reopen a plant (details supplied) at Carrigtwohill, County Cork; the meetings held with the owner; the requirements to be put in place if the plant was to receive State assistance; the final outcome to date; the plans for the future in this regard; and if she will make a statement on the matter. [10335/02]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

At my request, senior IDA Ireland executives met with the management of the company. The first of two meetings was held on 8 March 2002. At that meeting, IDA requested that the management examine a number of alternative restructuring situations whereby the plant could continue to operate at its reduced level of capacity until the market position became clearer. These included submitting a long-term viability plan to IDA, reducing manning levels in the plant in line with existing production levels and selling off surplus assets, i.e. a land base of ten acres plus. This would provide the necessary funds to keep the operation going for the remainder of 2002.

IDA met with the company again on 12 March 2002. The meeting was arranged to discuss the position, following an assessment by the company of the various options put forward by the IDA.

The company decided that, if it brought manning levels into line with output of 25 tonnes, it would still make considerable losses due to the high fixed costs of running the operation. The company was also not prepared to sell off its land base to fund trading losses as this would dissipate the asset base further, and affect payments to creditors.

IDA understands that the management team have made considerable efforts to keep the plant operational in a particularly difficult trading environment, and that all the options have been examined. Unfortunately, all of these options have indicated that the plant will continue to incur substantial trading losses at existing output volumes. Given that the US market for the company's products continues to remain depressed, with no sign of an upturn, the plant cannot continue to operate in this uncertain environment.

The IDA is not empowered to fund the trading losses of a company either under the Irish Industrial Development Acts or under EU State aid rules. IDA could only play a role in assisting the company if there was a restructuring plan that could clearly demonstrate a return to profitability and long-term commercial viability. Following on from the two meetings held with the company, it is IDA's understanding that the company would not be in a position to submit such a proposal.