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Seanad Éireann debate -
Tuesday, 9 Jul 1991

Vol. 129 No. 15

Adjournment Matter. - County Leitrim Mineral Water Company.

I thank the Minister of State at the Department of Agriculture and Food for coming into the House on this motion and I look forward to his reply with great interest. I would like for the benefit of the House to briefly outline the background to this motion.

The company concerned which is situated in the heartland of Leitrim launched a mineral water product called Blue Mountain on a test basis on 1 August 1989 and it is now a commercial reality. The company controls 100 per cent of the Irish five litre market and hopes to break into the market in the United Kingdom, Germany and the Benelux countries. They have tapped into a niche market which they wish to expand and to do so they require a new plant. The company has worked with the Institute for Industrial Research and Standards to acquire recognition for its natural mineral water. They also intend having their water tested by the FRESIMUS Institute in Germany and the valued endorsement of this renowned centre will give them a decided marketing advantage.

Under the heading of Industrial Development the recently formed Arigna task force recommended that all natural resources should be explored and this is what Wingrove Products intend to do by marketing their Blue Mountain product. As the Minister will be aware, the Arigna task force was set up under the aegis of the Department of Energy, the Department of Industry and Commerce and representatives of the local authorities directly affected by the closure of the Arigna mines in north Roscommon-mid Leitrim last year with the loss of 150 jobs.

My concern centres around the perceived attitude of the Industrial Development Authority towards applications from this company for capital grant aid. To exploit the natural resource located at the facility in the form of mineral spring water it is bottled in distinctive packaging and is distributed direct to supermarkets, hotels and health shops throughout Ireland North and South.

The principal involved in the company has a proven track record in the mineral water business going back over 20 years. It is an act of faith on his part that at this stage in an illustrious business career he has launched yet another enterprise in his home town. The difficulty the IDA face in attracting enterpreneurs and industry to this country is well known. It is a highly competitive market and the impressive document which contains the 1990 annual report of the Industrial Development Authority refers repeatedly to the difficulties encountered by the Authority in attracting industry here in the present economic climate. The difficulty seems to centre not only on the location of industries in various regions but in getting them to come to the country initially.

I am particularly pleased that the Department of Agriculture and Food are responding to this motion because the Minister of State who is with us this evening and the Minister, Deputy O'Kennedy, have repeatedly referred to the food sector in Ireland as one which should substantially grow in the years ahead in the context of 1992 and the completion of the Single Market. After all, the main perception of Ireland abroad is of a clean environment whose food products are second to none.

The term value added is often used by the Minister. My native town has a natural resource, a company has been set up, a substantial amount of money is involved, the principal shareholder is prepared to invest a certain amount of that money in this plant and in his very detailed business plan has made it quite clear that the company is viable, that its products are saleable and that he can provide much needed employment in an economically depressed area. Market research carried out by the company found a considerable market for the five litre bottle among cruiser traffic on the Shannon. Continental holidaymakers indicated that the five litre bottle was excellent value for money.

The significance of this aspect of the business report might be lost on the Department and on the Minister, which is understandable as he may not be familiar with the immediate area around the production facility in Drumshanbo. Let me enlighten the House by briefly referring to the significant growth in cruiser traffic up the Shannon in recent years as boating holidays become more popular. The House will be aware that the Government are committed to the spending to almost £30 million on the reopening of the Ballinamore-Ballyconnell canal, a major engineering project and probably the biggest engineering project here of its type this century. When opened in the mid-nineties this canal will link with the Erne and Shannon waterways to provide one of the longest stretches of navigable waterway in Europe. The hope is that the remainder of the Lough Allen Canal will be reopened to allow access into the first lake in the Shannon which would further enhance the tourist potential of the area and attract substantially more visitors as years go on.

The company has obviously done its research well and see this as a growth market. It makes the point that there are at present 500 cruisers for hire on the Shannon for six months of the year along with 1,000 privately owned boats. It states that if it could penetrate this market it would sell 24,000 containers annually. It hopes to attract 75 per cent of this market and also to break into the casual private boat user market as well. The report goes on to give in great detail the projections over the first number of years and what is of importance in the context of this motion is that the employment potential in phase one according to the company would be 37.

The company is also anxious to erect a blow moulding plant at its facility in Derryhollow just outside Drumshanbo to achieve a substantial saving on the purchase price of bottles from Suffolk, England, where the company curently gets its raw material. No company is currently carrying out this type of operation in Ireland and consequently they are anxious to have the means of production of this important raw material attached to the production facility at Derryhollow. The transport costs alone is currently 15p per bottle or 60p for a five litre bottle, adding substantially to the cost of production and ultimately to the consumer price. The company state that the advantages of production at Drumshanbo of a blow moulding plant would reduce the cost of a five litre bottle by 30p and this would make their operation in the mineral water market extremely competitive. It would also reduce the storage problem as bottles could be blown as required. The company say the job potential in year one in the blow moulding plant would be six.

Costs involved over the three phases would be of the order of £300,000 and the principals involved in the company believe they are as entitled as any other company in Ireland to be sympathetically considered by the Industrial Development Authority who are charged with encouraging and attracting not only foreign owned but indigenous industry. It is unerstandable that the principals should feel somewhat frustrated and disillusioned at this point in their industrial development at not having received a more positive response from the Industrial Development Authority as regards capital grants.

I would like to draw the attention of the Minister, not that he needs any reminding, to the report of the IDA. Under details of capital expenditure, the Industrial Development Authority define their new industry programme, and under the heading of capital grants they state:

Capital grants are provided towards the cost of fixed assets including site development, buildings, new machinery and equipment. The IDA also provides rent subsidies towards the cost of leased premises.

I know that it is probably a little spurious to quote the total grant aid in County Leitrim relative to other counties in the region because it might be interpreted as a distortion of the reality because industrial development is piecemeal by its very nature. Some areas will benefit more than others in particular years but, for the purposes of this motion, it is important to put on the record of this House that in the north-west IDA region, the total amount of grant aid is of the order of almost £6 million for 1990. Yet, of that County Leitrim has received a little over £750,000, with the balance going to Sligo and Donegal and that is only in the current year. I make that point only in passing because it could be argued, if one looks at the report in further detail, that other countries other regions have received considerably less. In the Minister's own county of Cork and his constituency which borders on Kerry, I note that the allocation to Cork, the south-west region, is substantially higher than that going to Kerry. This is for very obvious reasons of location and the population size of Cork city, as the capital of the south. It is relevant because there is a perception in County Leitrim that the Industrial Development Authority have, as their preferred option, development outside the county rather than in the county.

I can understand an emphasis being placed, for example, on Sligo. Sligo town is a growth centre. I applaud and commend the IDA's activities in that area and their success over recent years in attracting substantial and significant industry to what is essentially now accepted as the capital of the north-west. In the regional development section of the report, Mr. Eamonn Howley, the regional manager, whom I know, respect and admire for the work he does in attracting industry to what is a difficult peripheral region, makes the point that:

To create a resource for attracting industry to the smaller towns in County Leitrim, the Industrial Development Authority is offering a special incentive package for its advance factories in Ballinamore and Drumshanbo.

Obviously Mr. Howley, and the Industrial Development Authority in general, are very aware of the continuing frustration felt in County Leitrim at the perceived lack of success in failing to fill the advance factory at Ballinamore which has never been occupied since it was opened and the 10,000 square foot advance factory in Drumshanbo which, for five years of its 11 year life, housed a shoe factory which closed with the loss of 100 jobs in 1986.

It is against that background that I put this motion before the House for consideration by the Minister. I genuinely believe that there is a case to be answered by the IDA, where you have a local entrepreneur who has a proven track record in his particular area of expertise, who has spent money, time and that expertise on drawing up a viable business plan and who is then faced with the reality that all the Industrial Development Authority will offer are employment grants which would total a derisory £40,000 in the context of the overall cost of £300,000. I accept that the type of product the company are involved in could be seen to be adding to an already overcrowded market. However I ask the Minister to consider the location of this plant, the extreme difficulties the IDA themselves are facing in attracting outside industry and the substantial loss of jobs, not only as a result of Arigna but in my own town of Drumshanbo. Some 60 jobs have been lost in the Laird food group since 1988 and almost 100 jobs in Mattil since 1986. Coupled with those lost in Arigna, over 200 industrial jobs have been lost in what is effectively a rural area. Here we have a man and a company who are prepared to put their money where their mouth is, as an act of faith in the area in which he lives and to provide real employment, not just medium term. He is not just somebody who will come in, take the money and run because this man has nowhere to run to. He lives in the area with his family and, like the rest of us, he has to stay put.

I hope the Minister will re-examine the application before the IDA and come back to me at some point and at least give me an indication that the matter will be re-examined and the company concerned treated in a much more favourable manner than they have been to date.

Let me explain in the friendliest possible way to my colleague and friend, Senator Mooney, that the Industrial Development Authority are an autonomous body charged under the Industrial Development Act, 1986, with the implementation of national industrial policy. The specific matter raised by the Senator relates to the day-to-day activities of the Authority in which the Minister for Agriculture and Food has no direct function and is precluded from becoming involved in. It is, therefore, not appropriate for discussion here.

In a personal capacity, I want to say I will be very glad to arrange a meeting for Senator Mooney with the appropriate personnel from the Industrial Development Authority. From what I have heard, this appears, on the face of it, to be a worthwhile project and I would like to see that it gets a fair crack of the whip. I would like to see progress made to assist this development in Drumshanbo.

I would like to thank the Minister for coming to the House. I did not anticipate that he would solve the difficulties I presented. Indeed, it would have been nothing short of a minor miracle if he had been able to be more specific than he has been. I wished, in the context of the motion, to question an overall policy that seems to have developed within the IDA towards specific projects of which this is one. In that context perhaps the Minister could examine it and take a more favourable view? I am very grateful to him for his promise of further examination of the specific issue before us. I hope I can have discussions with him and his officials as to how we can proceed. I thank the Minister again for his courtesy in the matter.

The Seanad adjourned at 8.10 p.m. until 10.30 a.m. on Wednesday, 10 July, 1991.