Seanad Éireann debate -
Wednesday, 6 Jun 1984

Vol. 104 No. 4

Adjournment Matter. - Plasterboard Imports.

Mr. Fitzsimons

With your permission, I should like to allow some of my time to Senator Lynch who is concerned with this matter and who has close associations with Kingscourt.

First of all, I want to say that Gypsum Industries Limited is one of the big success stories of Irish industry, having started in 1936 with ten men and less than 10,000 tons of quarried rock, to 500 employees this year and 380,000 tons of rock processed.

Foreign imports of plasterboard are a serious threat to GIL employment. If, for example, imports gain 20 per cent of the Irish market, at least 200 jobs at GIL could be put at risk.

The present threat comes mainly from Spain, with French and East German board currently in the background. Ireland has the highest per capita consumption of plasterboard in western Europe, Spain among the lowest. The Spanish domestic market's annual demand is 2,500,000 square metres. The Epysa factory in Spain has a capacity of around 12,000,000 square metres. The Epysa factory is owned by Lafarge of France, National Gypsum of USA, and Uralita, a Spanish company.

The Spanish Government operate a subsidy system to encourage exports. This amounts to just under 10 per cent of full value, including agents' fees. Spain also maintains import duties of 24 per cent approx. to protect its home market from any counter-trading.

Epysa is represented in Ireland by the Iberian Trading Company, whose principal is Senor Vincente Alonso Vicedo. This man has also been involved in other business ventures in Ireland. The company deals in a range of products, including imported chipboard, hardboard and bricks. These come in through Wicklow harbour on a regular shipping run from Spain.

The Spaniards have adopted a price cutting technique for penetrating the Irish domestic market in plasterboard. Their current offer is GIL's list price less 15 per cent, plus one-quarter of all plasterboard purchased free. This is an effective discount of 40 per cent on GIL's list price.

The Spaniards have also adopted other tactics. When the board was first introduced into Ireland, it was bound with yellow tape and prominently displayed the maker's name and country of origin. Now the Spanish board is being sold unmarked with a green stripe and a plain tape. No manufacturer's name or country of origin is specified and, in that context, the green stripe is particularly effective.

Information that Iberian Trading's representatives are making this offer has been confirmed by individual merchants throughout the Republic, including the following areas: Dublin city; Dublin county; Cork; Galway; Wexford; Clare; Kerry; Limerick; Laois; Carlow and Kilkenny. The same information has been received from trading organisations representing 46 builders' providers in 20 counties. Some have already purchased Spanish board, others are thinking about it. In a shrinking, recession-hit market, merchants are vulnerable to such tactics.

GIL board is subject to price control and all increases for the last five years have been approved by the Prices Commission as fully justified against rising costs. GIL is the sole manufacturer of plasterboard on this island, and has been primarily responsible for the development of the large-scale usage of gypsum products in Ireland. However, despite energy and electricity prices significantly higher than in the rest of Europe, gyptex board is not expensive when compared with the prices currently obtaining in other European countries. For example, the domestic prices in sterling equivalent per 100 square metres apply to the following countries: Germany, 97.68; Holland, 93.15; France, 88.60; UK, 89.59; Republic of Ireland, 91.82; Spain, 85.30; Spanish board on offer in Ireland 61.21.

The Spanish domestic price is slightly cheaper than average European price levels. This may be due to the artificial nature of the Epysa plant, with its mainly export orientation. For example, a low Spanish domestic price could considerably complicate any claims of dumping against that country. However, from the forementioned table it can be seen that the Spanish board on offer in Dublin is a full 30 per cent cheaper than the equivalent Spanish domestic price. This, by the EEC definition, is dumping.

GIL has invested millions of pounds in equipment in the last decade, and currently intends to maintain this programme. Planning permission is being sought for a new open cast mine, which should guarantee gypsum reserves beyond the end of the century. Other major multi-million pound investments are currently under consideration.

The real nub of the matter is that the Republic of Ireland has home demand which, for many industries, roughly equates to the output of one medium-sized, efficient, manufacturing plant.

Due to the deepening recession in the Republic, the situation is now finely balanced but, currently, GIL can still maintain a three-shift, five-day week, with full employment for its labour force at optimum efficiency levels, by supplying the Republic's domestic market and exporting to the North. Therefore it can be seen that even a small erosion in market share could lead to reductions in manpower and/or shifts. There would be a corresponding rise in production unit costs, and this would reduce export competitiveness, with consequent fall in sales, leading to further lay-offs, and so on. This spiral is difficult to reverse once in motion and would almost certainly have an adverse effect on future investment intentions.

The home market holds the key to competitiveness and, therefore, to a stable and properous future for any company. Gypsum supplies the cement industries north and south of the Border. The dumping to which I have referred is well orchestrated and not a haphazard approach.

There is a serious danger that the price structure will be destabilised, which would result in a serious loss of employment. In one year Gypsum Industries Limited pay approximately £1 million for electricity, £2.4 million for PRSI & PAYE, and a further £6.4 million in wages. Gypsum Industries are concerned with this situation. They ask for, and are entitled to, parity and fair play, but to get this it is vital that the Government would act in this matter and act now.

Mr. Lynch

I join with Senator Fitzsimons in supporting this motion. I am more than delighted and appreciate very much that a Minister from our own constituency, Deputy Bruton, has come in to listen to our discussion here and I am more than hopeful that he will be able to help in this regard. Gypsum Industries Limited, Kingscourt, have a problem at the moment because of dumping of plaster products which is a serious threat to the 500 workers who are employed on a regular basis there. I know that the Minister, more than anybody else here, appreciates the tremendous effect that Gypsum Industries have especially in the north Meath area as well as Cavan. Kilmainham Wood, Carrigleck and Nobber have made tremendous progress over the years due to the fact that many families who might have had to work in Dublin or emigrate have stayed at home and secured permanent pensionable employment with Gypsum Industries. They have, with the aid of State grants, built their own homes and there has been a tremendous amount of building of new houses and development in that area, all due to the fact that good steady employment was available through the good offices of Gypsum Industries.

At a time of recession, especially in the building industry, positive action should be taken to try to help Gypsum Industries. I know that we had a similar problem which raised its ugly head in 1982 with the dumping of cement on the Irish market and to a great extent that problem has been alleviated. GIL have made tremendous progress since they started in 1936 and steady employment has been given to people in north east Cavan and north Meath. They are the only large industry in that area; other industries are comparatively very small. Industrial development as we know it in other areas in this country did not expand to any degree in the north Meath-north east Cavan area or in Kingscourt but Gypsum Industries have provided a sense of security for the people in that area. Coupled with that, the industrial relations in GIL and the quality of the product produced there are not just on a par with but far exceed anything here or in any other country. We are very concerned that large scale dumping is taking place, and we are afraid that if it escalates it will lead to many redundancies and a fall off in the balance of payments. The repercussions, as I am sure the Minister is aware, will be catastrophic for north Meath and Cavan. I appeal to the Minister to accede to a request to do whatever he can, and I am more than hopeful that he will do so.

Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton)

I am very glad to have this opportunity to speak on the first occasion in this Seanad on a motion raised by my two county men in regard to a matter about which I share their concern. I am well aware of the very high level of employment which is given by Gypsum Industries in the north Meath area, which would be in many ways an economic and social desert were it not for the very major injection to the economy made by the employment in the mines. I am very alert to anything which could adversely affect Gypsum. I met the managing director and a number of directors in the company quite recently to discuss the subject that the two Senators have raised. I gave them certain advice as to how to proceed and indicated to them how I would hope to co-operate with them in achieving our joint objectives.

I am sure the Senators would not expect me to go into great detail on what is clearly a matter of commercial secrecy to some extent. However, I can say that the possibility of initiating remedial action against people who are dumping in the Irish market no longer rests with the Irish authorities. Since 1973, when we entered the EEC, we undertook to allow these matters to be dealt with by the European Community authorities rather than by our own national Government. This clearly restrains the unilateral action that I could take.

A number of complaints have been made about how the firm referred to by the Senators is able to achieve their price reductions. Reference is made, for instance, to the system of taxation applying in Spain in regard to exports and imports, and the suggestion is made that this system would not survive in the EEC where fair trading is a basic principle. However, the procedures which would have to be undertaken to bring this to an end are quite cumbersome, and Spain is already engaged in negotiations with us with a view to becoming a member of the EEC. It is probable that by the time those procedures would be concluded Spain would have to have got rid of these provisions anyway. One would not be able to achieve anything that would not happen anyway. There is also the fact that in practice anti-dumping measures have tended to be taken only where it is felt that the entire Community market is the subject of dumping rather than the idea of one region within the Community as a whole being subject to dumping. Clearly, this idea of having to require the entire market to be the subject of dumping rather than part of it makes a lot of sense when one is talking about the possibility of dumping, say, in Belgium.

It is very hard to envisage someone dumping in Belgium and not dumping in the Netherlands or Luxembourg as well. Unfortunately this rule tends to operate a bit to the disadvantage of a country like Ireland which is essentially an isolated and discrete market. It is possible for dumping to take place in Ireland without any flow-over effects into Britain or the continent of Europe. This practice tends to restrict anti-dumping measures dealing with dumping that is affecting the Community as a whole rather than a regional market, and could operate to the disadvantage of a country like Ireland. These are the obstacles that we face in getting the Community to take action against any dumping that there might be into the Irish market, if indeed this is dumping. Until procedures have been gone through we cannot prejudge this case and I would not wish to do so. However, I would like to assure the Senators that I am very interested in the matter. I have met the directors concerned and I have indicated to them that I will do everything in my power to assist them. I expect that they will be in touch with me in the next week or so on my invitation on the occasion of my last meeting with them to see what further action can be taken. At the moment I am awaiting a response from them rather than the other way around.

Senator Fitzsimons made a very interesting speech and, obviously, had given a great deal of preparation and thought to what he had to say. In a way, it is regrettable that he should have mentioned the name of any individual. I feel there is some question of propriety here in regard to naming individuals in any context. However, I think it is a matter for the Seanad to decide what practices they should have in this regard, but I think it is better not to name individuals in this context, however one may feel about the effects of what they are doing. I am concerned about the matter and I am keeping closely in touch with it. I am awaiting further submissions from them and will be taking the matter from there.

The Seanad adjourned at 8.10 p.m. until 10.30 a.m. on Thursday, 7 June 1984.