I was talking about jobs in Tuam. I would like to reiterate that I believe jobs should be made available in Tuam. There has also been the closure of the Thurles factory and while I know there are some jobs there, there is a target of something like 384 jobs for 1992. Hopefully, that target will be met because Thurles is a town much in need of employment. It is not a town with industry and its hinterland relied on the Sugar Company and related activities over many years.
I wish to make reference to the annual report of the Irish Sugar Company. In 1989-90 the average annual employment in the group was 1,757 at a total cost of £33.2 million. That is very significant. It shows the considerable employment content and the amount of money in circulation as a result of that employment. There were 1,556 people employed in 1988-89 at a cost of £28.7 million. One could go on and on. There is some very interesting information in the annual report but I am sure it is something everybody here has read.
The Sugar Bill is primarily to provide for certain matters relating to the restructuring of the Sugar Company. The primary function of the legislation is to provide for a restructuring which will enable the company to pass from State owned to a more widely diffused ownership in partial privatisation. Before one enters into discussing the Bill in any detail which we will be doing at an early date, there are a number of general points in relation to the processes which I believe are very relevant and should be made. I have referred to some of them already.
First, there are questions that have to be asked in relation to certain matters concerning growers, workers, and we must, above all, get firm assurances on these. The Sugar Company are now a public limited company with an issued share capital of £66 million comprising of 65.5 million ordinary shares of £1 each and 0.5 million of 6 per cent cumulative preference shares at £1 each. The Minister for Finance holds all these shares as of now with the exception of a small number of qualifying shares held by the directors which amount to something less than 0.5 million preference shares.
As I have said already, the company while mainly involved in the process of sugar engaged in other activities. They have almost 100 per cent of the market for sugar in the State, 70 per cent of the market in Northern Ireland and a small market for industrial sugar in the United Kingdom. The company are also involved in the food sector in recent years and there have been a number of acquisitions in the food sector area.
I made reference to the acquisition of the Odlum share of 50 per cent and there is provision for the acquisition of a further 50 per cent of that operation. Agricultural trading has become a very important feature for the Irish Sugar Company. I understand Thurles could be developed very fully along the lines where it would present a very appropriate location for some developments there in conjunction with other suitable businesses. The company have reported net profits on ordinary activities since 1986 and had a record after-tax net profit of £15.35 million in the year ending September 1989 compared with £11.8 million in 1988.
During the period of recovery profits were applied in reduction of borrowings and large cumulative losses which had been incurred prior to 1986. Turnover in the year ending September 1989 was £216 million which was made up in the following way: the sugar division, £125 million; the food division, £34 million; agri-trading division, £57 million. The turnover consists, and this is very good, largely of Irish sales with only £36 million accounted for by sales outside the State. The financial results of the Irish Sugar Company for the year ending September 1990 again are quite encouraging. It is against that kind of background that we are now approaching a situation where the company being partly handed over to private ownership.
We talked about the equity which the Government contributed over a number of years. They contributed £20 million in 1983; £9 million in 1987 and £30 million in 1982. This was a major injection which brought the total Exchequer equity to £65.5 million. This has been, and continues to be, a considerable cost to the State. On that large amount of money a dividend has not been paid because of the legal ban on such payment until cumulative losses have been cleared. In addition, because of protracted loss-making the company have paid little corporation tax. This proposed legislation, when and if enacted, will at last enable the State to get some return for its investment; and the State getting it means the people of the country getting it. I think this is highly important. This will be achieved through the sales of shares and the payment of dividends on the residual Exchequer shareholding following the proposed flotation. There are various options to be considered by groups and committees who are putting the finishing touches to this operation at this time.
One could continue the present operation, but I do not think it is a desirable option and it should be departed from. That approach of continuing the present line would be appropriate if the company was prepared in the long term to remain in a static rather than a dynamic position. We do not want to have it in a static position; we want to have a dynamic approach in it. Therefore, we must move forward.
There will be significant changes in the context of the Community sugar regime, the outcome of the GATT negotiations and the fact that in Europe the terms of the company will be of vital consequence. We must also recognise that for 5,000 growers of sugar beet this industry is very important. There are 82,000 acres approximately used for the growing of sugar beet by 5,000 growers. I think it is safe to say that, even taking milk production into account, in the last year the production of sugar beet was the most lucrative line of farming. Regrettably, we are tied to a quota arrangement, to which I referred earlier. We must make sure that we retain that A quota and B quota; but at the same time it does provide significant relief to a very depressed farming community, a significant relief to at least 5,000 of our farmers.
Recently I had discussions with some farmers involved in the growing of beet. They had just a few points of concern which I want to raise. The first is this. It is understood that the first board will be appointed by the Minister, be it nine directors or whatever the number is, I am not certain. I would ask the Minister: will the next board and chairman be appointed as in any other company by the shareholders at an annual general meeting? It is highly important and desirable that that be the case. That should show an absolute involvement on the part of all concerned that the shareholders would have that right to appoint the chairman and board members at an annual general meeting, which, I would like to think, after this legislation has gone through, would be held at a reasonably early date after the board have been appointed by the Minister. I accept the appointment of these directors in the first instance, but I would urge that the first annual general meeting would not be left too long. The beet and vegetable division of the Irish Farmers' Association — they may have had discussions with the Minister in the recent past — obviously have discussed this matter in depth. They are extremely concerned that their right of negotiation, which they have at present, would continue and that there would be no interference whatsoever with the existing process for negotiation. I am familiar with the negotiation machinery that has successfully operated for the benefit of the company and of the growers over a number of years and there should not be any interference with that.
There is one other very important point, that is, that farmers are paid a due and just reward for the amount of sugar extracted from the beet. I think this is highly important. This can be, as we all know, depending on climate and so forth, a very variable thing. It is of paramount importance, and deserving of putting on the record here today, that, first, we have our board appointed at the AGM; secondly, that we have our negotiating machinery between the growers and the company continue in a meaningful form, as it exists today; and, thirdly, that growers are paid fully and adequately for their sugar beet.
It is essential that the existing growers' negotiating rights be protected — not just the price but their quota, contract distribution and redistribution, including the right of all existing contract growers to hold and maintain their contracts. In addition the growers' consent must be necessary to prevent the removal of any quota from Ireland. One could not over-emphasise the importance of the quota for this country and I think all concerned — and, I am sure, the Government, too — would have a positive and active interest in ensuring that. I have referred already to the necessity for a fair and equitable share of the total sugar extracted from the beet and the crowns to be paid to the growers of the crop.
Following their last meeting the company now propose to look positively at the problem of extractability after 1991 as part of a proposed new quality payment for beet. My recognition of the growers' claim is very positive and I assume that the Minister shares that point of view. The beet growers' representatives were a bit disappointed that there has so far been no tangible concessions given on this issue for 1991, a crown tare concession. That is something we can discuss on Committee Stage. It is a little bit disappointing that the company have so far failed to resolve the outstanding dispute with the growers on sugar extractability payment prior to privatisation, because I think this is the time to do it; but it has not happened. Perhaps the Minister could elaborate on this matter. It is of national concern at this time. This company about to be set up and to be known as the Greencore plc should have the very best regulations governing it on its establishment. In the first instance, we know in regard to the new company, Greencore plc, that the directors are going to be appointed by the Minister. As I have already said, I would like to believe they will be appointed subsequently by the growers, the workers and all the shareholders at an early annual general meeting.
This is worthwhile and progressive legislation. There are a number of amendments which hopefully will be taken on board. I would like to pay tribute to the excellent work of the chief executive, Mr. Comerford, in bringing the Sugar Company to a position of good growth and good health, economically, financially and otherwise, and to his board as well, but particularly to Mr. Comerford and his staff who have worked very hard in changing the position right around.
