In order to explain the general purpose of this Bill it is necessary to outline the circumstances which have led to its introduction. My Department has had assocations for the past 12 years with an English firm named Alginate Industries Limited. This firm has been engaged in the extraction of Alginates from seaweeds since 1936, and all this time has been a buyer of Irish seaweeds, the gathering and transport being organised by Gaeltacht Services and the material being shipped in the air-dried state to Scotland for processing.
Early in 1946, the company decided to form an associate Irish company the better to ensure their supplies of these raw materials. Plans were made for the Irish company to engage in the purchase, sale and shipment to the English company of air-dried searods. Later in the year 1946, the English company became interested in ascophyllum (rock-weed) as a supplementary raw material for the production of a kind of alginate which would cater for certain markets which could not be satisfied out of the limited annual production from searods in Ireland and Scotland, and it was decided to set up a plant in Connemara to dry and mill the weed instead of shipping it unprocessed from this country.
The Irish company was incorporated in February, 1947, with a capital of £6,000, of which 51 per cent. was subscribed by an Irish interest. A site for the drying and milling plant was acquired at Kilkerrin, near Carna, and close to the largest ascophyllum belt in Europe. An agreement was concluded between the Irish and English companies for the sale and purchase of seaweeds whether in their air-dried or milled states and provision was made for the supply of machinery and technical assistance by the English company. The milling factory was completed in February, 1948.
While the factory was in course of erection the position developed that certain chemicals required for the processing of ascophyllum weed were no longer available to the English company and that, therefore, milled ascophyllum weed would not be required for the time being. The Irish company was, therefore, asked to substitute for the agreement to supply milled ascophyllum weed one for the supply of milled searods for the production of which the milling plant was also suitable. At the same time, it was found that the capital of the Irish company was insufficient and would have to be increased to £10,000, in which increase it would be necessary that the Irish partners should participate so as to keep their share up to 51 per cent. While these matters were awaiting settlement a change occurred in the ownership of the Irish interest, and in March, 1948, the Irish partners asked to be released from participation in the Irish company.
My Department suggested to the English company that they might apply for a new manufacture licence under the Control of Manufactures Acts to enable them to get complete control of the Irish company subject to subscribing for the majority of the shares. The English company, while being of opinion that such course might be feasible and to some extent advantageous in the case of the milling of the ascophyllum weed which is found in close proximity to the factory, could not agree that there would be any advantage in the case of the milling of searods. Having regard to the cost of transpost of searods from far and near points of the coast to the factory such milling could, it asserts, be done as cheaply and more conveniently after direct transport to Scotland at its plant there. It should be remembered that the milling of searods here had been proposed only to replace the milling of ascophyllum weed until its use could be resumed.
We decided to take up the interests in this project and ask for 51 per cent. of the share capital by this Bill.
The reasons for adopting this course may be summarised as follows:—
(a) Unless it were adopted, it seemed certain that the rod-milling industry would be lost to the Gaeltacht. Recent indications show that the ascophyllum scheme may be revived in two or three years' time. Failing participation in the Irish company by the Department, the obvious and most economical course for the English company would be to close the Kilkerrin factory and revert to the direct shipment of searods to Scotland. The factory could be reopened on the revival of the ascophyllum scheme.
(b) The searod industry is regarded as the one showing the best prospects of the marine products industries. The uses to which the products of the searods are put are such that it appears that the demand for these will be lasting, will steadily increase and will be a valuable source of income to the men engaged in the industry on the western seaboard. The collection of searods has been increased and approximately £12,000 has been paid to the gatherers for the past season's harvest.
(c) It is estimated that the working of the factory will mean the distribution of an additional £9,000 in respect of wages, turf and services rendered locally.
The Bill now before the House accordingly proposes to authorise the expenditure of a sum not exceeding £5,100 in the acquisition of shares of £1 each in the Irish company.
Section 1 of this Bill is self-explanatory. With regard to Section 2, the capital of the company, at present £6,000, is to be increased to £10,000 as already stated, and this section provides for the acquisition of 51 per cent. of the increased capital of £10,000, so that the majority holding will be in the name of the Minister for Lands. Section 3 deals with the powers of the Minister in respect of his shares.
With regard to Section 4, it will be necessary that the Minister should be represented on the board of the company, and this section accordingly provides for the nomination of nominees and their powers and functions. Section 5 is required because a Minister of State as a corporation sole is not a qualified person under the Control of Manufactures Act, 1934.
Sections 6, 7 and 8 are self-explanatory.
