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Seanad Éireann debate -
Wednesday, 10 Jul 1991

Vol. 129 No. 16

Trade and Marketing Promotion Bill, 1991: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The creation of a favourable economic climate for industrial development has been a major achievement of the Government since 1987. We have arrived at a situation in this country where we have a stable currency, low inflation and a positive balance of trade.

A further economic priority for this Government has been to provide the best possible institutional structures to assist industry to increase production, sales and, very importantly, employment. If any lesson can be drawn from recent history, it is that the State cannot do everything, but what it does, it must do well. The best guarantee of such efficiency is to create institutions that precisely fill the needs of the day.

The decision to merge Córas Tráchtála and the Irish Goods Council was announced by the Minister for Industry and Commerce in his preface to the Review of Industrial Performance published in December 1990. Institutional arrangements for industrial policy must be determined by the requirements of the economy and of industry. This merger is a response to the changing trading environment in which small and medium sized industry now finds itself. The Single Market calls totally into question the distinction we have traditionally made between the Irish market and the markets outside. Between home sales and export sales, between being an exporter and not being an exporter, the Single Market places every firm in the same boat — a boat in which the prerequisite for survival is the ability to be internationally competitive.

Up to now, we could operate a two-tier system. The home market was one thing, export markets quite something else. What you needed to succeed on the home market was not necessarily the same as you needed abroad and for many companies who would never graduate to exporting, the need to be internationally competitive did not arise.

Accordingly, we had two agencies — one agency serving firms that were developing in the home market — the Irish Goods Council — and one agency serving firms that were developing in export markets — Córas Tráchtála. There is considerable support for functional rationalisation on the part of the "clients" of the agencies. Indeed, the agencies themselves — both their boards of management and staff — have acknowledged the inherent sense of what is now proposed. They have fully supported and co-operated with myself and my Department in the merger process.

Before going into some detail on what the Bill contains I want to set out some of the benefits which will derive from the merger. First, companies which graduate to exporting will no longer have to start an entirely new relationship with another agency: until now their early development was with the Irish Goods Council, and then when they moved to exporting they had to start all over again with Córas Tráchtála. Those Senators who have experience in business will know that the success of company development through agencies depends to a very important extent on the nature of the relationship that is built up on both sides, and that building this relationship is a time consuming process and one that involves personal commitment in both company and agency. To ask growing companies, whose resources are always stretched, to develop two relationships, where one could serve the need, is placing an unnecessary burden on companies, and one which it is now time to remove.

The second main reason we need one agency is that we want more companies to make the transition to exporting, and we want them to make it sooner. Because of the small size of our home market, Irish companies must move to exporting much earlier than companies of the same size would in, say, Britain or France. Companies there have a large familiar home market that they grow quite large in, but if Irish companies are to grow significantly, they must move outside this market at an early stage. By that I do not necessarily mean that they should export straightaway. What I mean is that their strategic focus should from the start be on a wider market than Ireland.

We do not want companies to grow with their sights fixed only on the Irish market, companies who start thinking about the outside world only when they need to look outside for growth. That approach means that their initial strategies will be moulded exclusively in terms of the Irish market. This increases the likelihood that they will approach exporting on the basis of trying to sell outside the country what they have done well with here. That is not the way. We want companies to be thinking about being internationally competitive from the very start. If they do so, then what they do in the Irish market will be a suitable basis on which to expand abroad when the time comes. There will not be any need to develop a new philosophy, a new approach.

The mechanism being proposed to effect the merger is as follows. Section 5 provides that the name of Córas Tráchtála will be changed to An Bord Tráchtála — The Irish Trade Board. Section 22 proposes that the new board will come into operation on 1 September 1991.

Section 6 conveys on the new board functions which combine the current functions of both Córas Tráchtála and the Irish Goods Council. The primary function of the new board will be to promote, assist and develop the marketing of Irish goods and services. Subsection (1) of this section, in many ways, is the key to the Bill. Although the drafting of the section follows the pattern of the 1959 Act which established Córas Tráchtála, there is an essential difference. This essential difference between the functions of the board established under this Bill and the functions given to Córas Tráchtála under the Export Promotion Acts is that, in the case of Córas Tráchtála, the functions were restricted to the exportation of goods and services. This Bill charges the new board with promoting the marketing of Irish goods and services and this will be done on both the domestic and overseas markets, which will be one market in the post-1992 period.

I want to make it quite clear to this House that the Bill will not result in any reduction in, or dilution of, the services which the Irish Goods Council has been providing over recent years. This point was raised in the debate on this Bill in the Dáil and, as I did in that House, I want to stress strongly that this Bill is not about closing down the Irish Goods Council and terminating its programmes.

The merger of the two organisations provides the opportunity for co-ordinating and enhancing the marketing support measures provided by both organisations to industry throughout the country. For example, CTT's network of regional offices will provide the new board with a facility for delivering a more regionalised service to firms selling exclusively on the home market.

A further factor which ensures the continuity of the programmes operated by the Irish Goods Council and, indeed, by Córas Tráchtála is the support they receive from EC Structural Funds. All their programmes are being supported in the Programme for Industrial Development 1989-1993, under the Community Support Framework. Since the commencement of the programme, the existing services of the agencies have been copperfastened and each has, with the assistance of additional funding, been able to expand into new programme areas.

I have spoken at some length on this issue because I want to leave no doubt about the health of the Irish Goods Council's operations. While I am still apeaking on section 6, I want to state at this point that a good deal of thought went into seeking a description of what the new board will be about. We have sought to give the new board a clear mandate, without getting bogged down in lengthy debates about the meanings of particular words.

For example, I know that Senators will be aware that the word "marketing" can be defined in a variety of ways by practitioners and academics. I would like to take a very straightforward stance on this matter. Marketing in the broadest sense is the link between society's material requirements and its economic pattern of response.

The task of the new board will be to assist companies in identifying markets, and in the development of their marketing skills to enable them to meet society's material requirements, so far as is possible, with Irish products. That is what the Government envisage the board will be promoting, assisting and developing.

If you look at what makes a company excellent, you will find that an excellent company knows how to adapt and respond to a continuously changing marketplace. The excellent company and its employees are committed to creating customers and to satisfying customers. An Bord Tráchtála will be charged with assisting companies to attain this level of excellence.

Sections 12 to 15 deal with the dissolution of the Irish Goods Council and the transfer of its staff, property, rights and liabilities to the new board. I want to make it clear that there will be no job losses on foot of the merger. The Government recognise that there is a major job of work to be done in improving the marketing capability of Irish industry and all the staff of the combined agencies have a key role in that work.

Section 8 of the Bill proposes that the aggregate amount of the sums which may be paid to the board for the purpose of enabling it to perform its functions will be increased to £400 million. The current statutory limit, as set in the Export Promotion (Amendment) Act, 1987, is £260 million and that figure will be reached in late August or early September this year. For this reason it is highly desirable that this Bill be passed in this session. If we cannot meet this deadline, arrangements will have to be made for Córas Tráchtála to undertake short term borrowings to maintain its operations until the Bill is enacted. I am quite confident of the full co-operation of this House to ensure that this Bill is passed today.

I should also add that it is estimated that, based on the spending projections contained in the programme for industrial development, the new limit of £400 million will cover Exchequer funding of the board until the end of 1994.

I would like to take just a few moments to describe, in general terms, the kinds of services which are supplied with this funding. Córas Tráchtála operates seven distinct marketing programmes and within each there is a range of related activities. These can, however, be summarised into three broad categories, first CTT provides detailed market information. Its network of 21 overseas offices provides essential on the ground assistance to exporters. Its market information centre in Dublin hosts the largest collection of market information in Ireland. Secondly, CTT operates a range of market development activities. These would include, for example, research activity which would identify potential markets for Irish firms or explore the best market entry strategies for particular sectors. The organisation of promotional activities like trade fairs, trade missions and inward buyers missions is also an integral part of its operations. Finally, CTT provides financial assistance to exporters through a range of schemes.

Since 1988, CTT has been operating its sales performance incentive scheme which provides modest amounts of financial support for marketing activities on a performance related repayable basis. A good example of a success story under this scheme is a firm in the West manufacturing car security systems. In 1989 the company was approved assistance under the sales performance incentive scheme towards the development of the UK market with excellent results. The company has recently become the approved supplier to Mazda in the UK and cumulative sales of £1.7 million in the UK have been achieved since the project commenced. During 1991 the company was approved for support under the targeted marketing consultancy programme to expand further its market development overseas.

The targeted marketing consultancy programme is the most significant grant scheme now operated by Córas Tráchtála. The scheme is a direct result of Structural Funds support and makes substantial grants available for major marketing projects. Although it only commenced last year, this programme has already approved 47 projects which could generate up to £600 million in additional exports.

For its part the Irish Goods Council provides general marketing advice for very small manufacturers who are totally reliant on the domestic market. In particular, it advises firms on opportunities in business-to-business sales and in undertaking sectoral marketing initiatives since 1989, the Irish Goods Council has been operating, again as a direct result of Structural Funds support, a programme of assigning marketing consultants to small firms which cannot afford inhouse marketing personnel.

One typical success story of a firm working with the Irish Goods Council is the case of two tool-makers who set up their own business in 1980. They visited a Goods Council organised subcontract opportunities exhibition which featured a wide range of imported pressed steel components. These exhibitions are designed to show small Irish firms the enormous opportunities that exist for manufacturing and supplying the industrial sector in this country with products which are currently being imported.

Working closely with the Irish Goods Council staff, the two business people decided to concentrate on component manufacturing rather than tool-making. They have been very successful in converting sub-supply opportunities identified by the Irish Goods Council into new business. Today some 60 people are employed and the company is Ireland's largest manufacturer of pressed metal parts to the demanding standards of the electronics and allied industry sections.

This Bill is also being availed of to bring some of the statutory provisions relating to the board in line with other Agencies. Section 7 provides that the Minister for Industry and Commerce will have power to give the board general policy directives. Section 10 contains a standard provision covering restrictions on the disclosure of information by staff or advisers to the board. Section 11 extends the provisions of the 1959 Act, relating to the nomination and/or election of board members and staff to the Houses of the Oireachtas, to cover elections to the European Parliament. Section 9 increases the number of board members from the present maximum of seven to eight, thus allowing the Minister scope to increase the spread of expertise on the new board to reflect its wider responsibilities.

I referred at the beginning of my speech to the Government's role in getting the institutional framework for its support for industrial development right. This Bill and the decision which it implements is the latest in a series of significant developments which have taken place since 1987 in the restructuring of State Agencies involved in industrial development and promotion. Among the most notable developments were: the establishment of FÁS to take over the functions previously undertaken by AnCO, YEA and the National Manpower Service; the merger of the National Board for Science and Technology and the Institute for Industrial Research and Standards to form EOLAS, a single agency with responsibility for the development, application, co-ordination and promotion of science and technology in Irish industry; and legislation is currently being prepared to provide for the amalgamation of the activities of NADCORP with those of the IDA.

In relation to the development of science and technology I note that the former Minister for Science and Technology is a Member of this House and I look forward to his contribution on this Bill.

I know some will say that this is an ad hoc approach to rationalisation of industrial agencies. I acknowledge that in a perfect world there might be some merit in that view. However, given the nature of a rapidly changing domestic and international environment and given the new challenges and threats posed by the Single European Market, Senators will agree that it is essential to have the freedom to review and, when necessary, change policy on a continuing basis.

This Bill is just such a response to the changing marketing demands on our firms. The logic and good sense of merging two agencies providing marketing support to Irish firms is clear quite apart from any general review of industrial policy.

Before concluding I want to deal with the focus of the new board. I see it as having four main strands. First, it will have a clear client group in mind. Its services will be overwhelmingly provided to and sought by indigenous companies. We are talking here mainly, but nor exclusively, of Irish-owned companies and mainly, but not exclusively, of small and medium-sized companies. Essentially what we mean by indigenous companies are those firms that have a significant amount of their strategic functions based here in Ireland, companies that have their marketing centred here, companies that are firmly rooted in the Irish economy. This includes, I am glad to say, a growing number of foreign owned companies.

CTT at the moment serves some 1200 exporting companies on a regular basis. The Irish Goods Council has a core client base of some 800 companies, most of whom do not export as yet. The aim of the new organisation will be to accelerate the sales growth of all these companies, wherever the opportunities present themselves.

CTT has, and the new organisation will continue to have, trade board functions which include the promotion of Ireland's trade in general. The new board will continue to have advisory functions to the Department of Industry and Commerce in relation to all trade and marketing matters, but in terms of its development thrust, the concentration will be on indigenous companies, most of which are Irish owned, and most of which are small and medium sized.

Secondly, the new agency will concentrate initially on one central task: helping Irish industry to take full advantage of the Single Market. Again, that is not the whole task. The new organisation will, as before, have a vital role to play in the development of export markets around the world, particularly in such important areas as North America, Japan and Australia. However, the concentration will be, as it must, on Europe. For those companies who do not export — to prepare them for competition from within the EC and for those companies who do export, to help them develop markets in what will be the world's biggest trading entity, something in the region of 340 million people.

Thirdly, the new organisation will provide financial support for marketing by firms. Both CTT and the Irish Goods Council have begun to benefit from major increases in their resources via European Structural Funds. These resources will be available to the new board to help firms develop their markets, and to help them make whatever changes are needed to compete effectively in the new international conditions. They offer Irish companies a once-off opportunity to restructure themselves for the new world we are moving into. They will be available only to assist those companies who demonstrate that they are in earnest about the achievement of new markets and growth in market share.

Finally, this agency will be the eyes and ears of many emerging Irish companies in the marketplace, not replacing but supplementing and enriching the company's own presence. Through this new agency, a company will be able to get initial access to markets across the EC and to the main markets around the world. One of the great strengths of the organisation will be the combination of the deep knowledge of the marketplace available to CTT and the hands-on development skills of the Irish Goods Council.

The success of the new agency depends, more than anything else, on the commitment of its management and staff to the challenging task which they face. I take this opportunity to put on the record of this House my appreciation for the work which the staff in both organisations have done over the years and to express my full support for them in their future efforts. In my two years as Minister of State with responsibility for Trade and Marketing I have been constantly struck by the commitment, skill and energy of the employees of the agencies and I am very confident they will carry these qualities onto the new board to the great benefit of Irish industry. I am very impressed by all levels of both organisations, the Irish Goods Council and Córas Tráchtála. I feel that the discussions to date have been very fruitful in relation to both boards of management and both staff organisations. I am very confident this House will support the decision of the Government to bring the Bill before the House and to create this new board.

I commend the Bill to the Seanad.

We have no difficulty in agreeing with the proposals of the Government in relation to the Trade and Marketing Promotion Bill, 1991. It is a very simple matter of rationalisation and does not require a great deal of time or analysis. One of these groups, Córas Tráchtála Teoranta was dealing with the promotion of Irish exports whereas the Irish Goods Council had the function of assisting Irish industrial companies on the home market in what might largely be described as import substitution. In this age, compartmentalisation of what is fundamentally the same service is quite unnecessary. There has been rationalisation through membership of the EC in relation to tax incentives to manufacturing industry which, when we were our own masters, we were giving to manufacturing companies solely involved in exports. Under European Community pressure, rationalisation meant that we had to offer the same types of facilities to manufacturing companies at large, whether or not those companies were manufacturing for sales on the export market or the home market. This is an entirely rational and parallel development in so far as these two bodies are concerned.

The sales on the home market which the Irish Goods Council have been looking at are not as glamorous sounding as export sales but they are just as crucial because you can see the devastation in the old industrial sector over the past 20 years, especially in the rag trade. You can see the massive display of foreign goods on the shelves of Irish supermarkets and drapery stores and so on. Obviously Irish companies manufacturing for sale in this are replacing imported goods and effectively, that is import substitution. It has the same merit to the Irish economy as the export of commodities and if you regard import substitution sales in Ireland as identical to export sales then obviously there is duplication here. If you are seeking specialisation of support in specific sectors then, obviously, a single board established by the amalgamation of the two bodies can perform this task much more rationally and more cost-effectively as a single unit than as two separate units. For all of these reasons this simple Bill is rational, vital and necessary.

I have had recent personal experience of CTT people and I am full of admiration for the work they have been doing and are continuing to do. They have a fairly lonely life abroad. Sometimes a CTT executive is the only Irish executive working in an office abroad. He has a multi-faceted function and, in my experience, has been excellent. I have had recent personal contacts with CTT executives in Tokyo, Stockholm and Copenhagen. In two of these instances because of pressure of events I was going through at weekends and these people were prepared to come to meet me at my hotel, in two cases out of three on a Sunday, and got many things moving on a Monday morning. They were certainly acting beyond the bounds of duty and they are doing a very good job.

Their service is crucial as well for another reason. If one reflects not just on the success of Irish industrial development but on the failures as well, and this is an appropriate time to look at them, the single area for greatest disquiet in the entire history of Irish industrial development since the State was founded has been the huge extent to which successful industry in Ireland is foreign-owned and the very minimal extent to which industry operating here is Irish-owned. This leads to major grounds for disquiet. As the Minister pointed out, if you look at the major industrial developments by many of the multinationals, in a number of cases these companies are merely fabricating and manufacturing in this country and the core of the marketing thrust is in the corporate headquarters. If there is a pinch in their internal corporate economy, in the world economy or in the European economy, they tend to lessen the level of activity in some of the foreign countries of which this would be one and to do more and more from their own base.

We have a level of exports of Irish manufactured goods and it is a little annoying when, from time to time, CTT claim credit for that level of exports because a huge proportion of it would be going out through the multinational companies. They have huge inhouse marketing strengths and, in many cases, they do not use the facilities of CTT to a fraction of the extent as would a smaller Irish company. If the State is to develop, more fruitfully, a strong indigenous Irish-owned industrial base, an integral part of that plan has to be an input by CTT. The industrial revolution bypassed us. We have limited skills in this particular sector and strong support by an organisation such as this is of vital importance.

I note that the Minister in his speech said this specific rationalisation, which is happening against the background of the speech by the Minister last December in the context of the review of industrial performance, is merely a part of an overall rationalisation in the sector. He referred to three or four other linkages such as the amalgamation of the National Board for Science and Technology and the other science organisation in Eolas, which seemed rational. He referred to the merging of NADCORP into the IDA.

If I might digress for a minute I will mention there is an anomaly creeping in here which the Minister should address. NADCORP was established as an Irish State owned company in the venture capital sector to take equity in companies rather than give free grants. While it might superficially seem a good idea to amalgamate NADCORP with the IDA so that the IDA perform both functions, the functions are entirely dissimilar and they must be viewed as organisations wearing different hats.

There is one obvious administrative anomaly — the IDA are only responsible for industrial development in the areas of the State outside of the Gaeltacht. The Minister is proposing that the Industrial Development Authority will be in a position to grant aid to those involved in industrial development outside the Gaeltacht areas and NADCORP will take equity in industrial projects. However, in the Gaeltacht areas, there is only Údarás na Gaeltachta, a grant aiding body with an extremely limited budget. If NADCORP is only allowed to operate within the areas given to the IDA, it means that while, theoretically, the State has this philosophical commitment to strong development and support in Gaeltacht areas, it is likely that companies in the Gaeltacht areas will not have access to the benefits of State venture capital investment which will be available elsewhere. This is an anomaly which the Minister should address.

Industrial development has been only relatively successful. Rationalisation in the industrial sector in the last 30 years has seen the decimation of Irish owned companies, expecially in the rag trade, where there has been a massive development of foreign owned companies. We have to ask ourselves, in the most critical sense, if the Minister is assessing Irish industrial performance at present. It is not good enough to look at Irish standards and compare them with past standards or other statistics. In my experience a serious analysis of what is happening in this country can only be a most critical analysis of what is happening here in comparison with countries in the developed world.

Look at what is happening here at present. We have a catastrophic level of unemployment and a massive dominance of foreign owned industry whereas the economies of parts of western Europe, specifically the northern European countries of Norway, Sweden, Finland and Denmark, are very successful. Finland, for example, was decimated in the Second World War. They fought both the Germans and the Russians yet, against that climate they built up their economy and have virtually full employment. Why is there virtually full employment in a country like that, which started from a nil base in 1945 and a catastrophic level of unemployment here? Why in terms of ownership of industry have we been hugely unsuccessful in not building an indigenous base? Looking at the issue critically we can see that in countries such as Finland they developed a very strong indigenous Finnish-owned base with the development of technical institutions a generation before we did and, if we had the will, we could have done it as well. They have built in restrictive legislation which prohibits the ownership of a majority investment in industry in their countries. They will only allow foreign investment if it takes the shape of minority investment. We should aspire to what they have achieved. What we have today in the context of ownership of industry is the lesser of two evils. You have to grab investment when you can get it but when you see what other countries, from a weaker base, have achieved, there is scope for a very critical analysis. This is our single greatest weakness.

I would like to see the Minister for Industry and Commerce, in the context of his review of industrial performance, commission a study on comparative analyses between the lack of achievements in this country and the huge success elsewhere. He will know from reading OECD reports that some of them have been extremely critical of the relative failure that has obtained in this country.

I welcome the Bill because I see at the heart of it the development of an indigenous structure. I know CTT have done this in the past as have the Irish Goods Council. I congratulate them on their success in the past and wish them well for the future.

I congratulate the Minister and his officials on this Bill. It is timely and appropriate to the present economic circumstances. There is no doubt that the old system served us well in the economic climate that prevailed at the time. The two-tiered system worked quite well during those years. Córas Tráchtála played away games and the Irish Goods Council played at home. However, we are now dealing in a totally different environment with the imminent arrival of the Single Market. For that reason it is vital that we have one agency marketing Irish goods on behalf of Irish companies, be it at home or abroad. Competition will be severe.

We had the Competition Bill before the House earlier today. This will add to the competitiveness of Irish companies particularly those who have been dealing solely on the domestic market. Those who have been dealing on the European market have been subject to Articles 85 and 86 of the Treaty of Rome and are well used to performing in an open, competitive climate whereas those performing at home have not been subjected to those rigours. It is timely that we should have one agency to market our industry and our goods at home and abroad.

The policy of rationalisation and amalgamation that has been in operation since 1987 — it was not purely for fiscal reasons — was for the purpose of unity. I was personally involved in the amalgamation of the National Board of Science and Technology with the IIRS to form the new State agency, Eolas, to take charge of science and technology interests for the Government. It worked well and I believe this will work well too. There will obviously be teething problems in any process of rationalisation where two distinct bodies have been operating, even though they might have been operating with the same principles but in different areas. There will be some degree of cultural shock, personnel differences, but in my experience, they are temporary disarrangements that can be ovecome.

Senator Staunton adverted to the absorption of NADCORP into the IDA but that is not relevant to what we are discussing here. Of course, NADCORP has been one of the great tragedies. It was a socialistic, unrealistic, uneconomical dream in that dark period of Irish Government history from 1982-1987 when the tail wagged the dog and the Labour Party decided that NADCORP was going to be a great institution, would bring equity into Irish companies and would make them bigger and better but it failed. It is obvious that the IDA will swallow up NADCORP and that that will be the end of the socialist dream.

Córas Tráchtála and the Irish Goods Council have been extraordinarily successful in their separate roles over the last number of years. I need not remind the House that Córas Tráchtála was established by the late Seán Lemass at a time when political policy initiatives were considered totally unpropitious. Then, as now, the economic commentators cried that all policy objectives should be sacrificed for the instant achievement of financial stability. Economic development would have to be treated as a secondary priority by Government. Then, as now, the economists got it wrong. Under the leadership of the late Séan Lemass, even periods of financial stringency witnessed continuing departmental and governmental initiatives to encourage investment and employment. Córas Tráchtála Teoranta was established by Seán Lemass when he was Minister for Industry and Commerce in 1951. His objective was to use the new agency to encourage Irish export sales to the United States of America.

The establishment of CTT at that time had its critics. These were the same people who had derided Seán Lemass's other initiatives — the establishment of Shannon Airport, Bord na Móna, Irish Life, ICC, Aer Lingus and Bord Fáilte. Dare I say it, the spiritual descendants of those same critics who derided Seán Lemass are now more numerous than ever. To quote the Latin phrase "Si Monumentem Requiris Circumspice”— if you seek for a monument, gaze around. The legacy of Seán Lemass is very evident in the commercial life of the Ireland of 1991. The legislation before us like the partial privatisation of Irish Life last week, will help to ensure that the Lemass inheritence grows and endures to the benefit of new generations in the increasingly competitive trading environment which will come about through the Single European Market.

To move from the general to the particular, I would like to cite one example of the success of CTT, and some of the successes of the Irish Goods Council. If I tend to be slightly parochial please do not feel aggrieved because it is relevant to the Bill.

I would never feel aggrieved by anything the Senator says.

This concerns the extraordinary overseas development of the services offered by CTT to M.F. Kent and Company based in Clonmel, County Tipperary, employing 4,500 people worldwide and operating in 17 different countries. I will quote from the Irish Independent of 7 December 1990 and for once, what is written in the papers is absolutely correct. I tend to be cynical about what I read but I can confirm that what they wrote in that issue is correct. It states that the M.F. Kent Company had won a major contract to build a multimillion pound hotel leisure complex in Barcelona for the 1992 Olympics. The contract is worth £17.5 million to the company and it was CTT who played a major role in the organisation of this contract. CTT were actively involved in negotiating a giant venture between the Kent company and a local electrical engineering concern, Cobra Group. A hotel complex is being built for an American development company, Travelstate, and will be operated by the Ritz-Carlton group.

That is an example of what CTT achieved for an Irish company operating internationally. If I tend to be parochial it is because I have deep affinity with my own county of south Tipperary. I also have great respect for north Tipperary, particularly at times like last Sunday.

The Irish Goods Council played an active role in the development of a number of food companies in the south Tippeary region, including the participation at trade exhibitions of Dawn Fresh Foods; in in-store promotions and Roadshow '91 for Avonmore and Compsey; the provision of specific marketing and distribution advice coupled with the introduction to the trade of Nujuice and the launch of a new cheese range for Tipperary Co-op. In the clothing area the Irish Goods Council has worked with retailers, J. Clinton and Company, La Femme, Sheils and Showcase in Clonmel, Kingstons and Mister Mister in Tipperary and Twiba in Carrick-on-Suir during 1990 as part of the continuing "Look to our own Campaign". There were also a number of other retailers in Carrick-on-Suir, Clonmel and Tipperary town who took part in a national Christmas gifts campaign. The Irish Goods Council staff have developed and maintained close contact with purchasing staff in many companies in the south Tipperary region. It is appropriate that the Irish Goods Council should have close affinity with Tipperary since their former chief executive, Vivian Murray, was from Clonmel and they have maintained that contact.

In 1990 new sub-supply business of almost £750,000 was placed by firms in the region with other Irish manufacturers. Very recently a consultancy assignment with a company in the region was completed successfully. The company concerned in south Tipperary were very pleased with the work. A number of commercially sensitive issues are in the process of resolution before the benefits of the work come to fruition. When implemented, the plan should have a turnover in the region of £500,000.

The two organisations should be complimented on their achievements, they have served this country well, and their personnel deserve to be congratulated. The amalgamation of those two bodies will result in a single focus on marketing Ireland abroad. An Bord Tráchtála will be the name of the new agency. I urge their board and staff to always keep before them the dictum of Seán Lemass that patriotism has no higher or more urgent aim to serve than to ensure that the country will be able to keep its people. That was an excerpt from the Sunday Press interview in January 1957. I am sure the new agency will play its part.

It is with some reluctance that I follow the very stimulating contributions of Senator Staunton and Senator McCarthy and, indeed, the Minister's presentation has also been very worthwhile. I support the Bill, as Senator Staunton has already indicated. Its purpose is to amalgamate Córas Tráchtála and the Irish Goods Council. I wish to pay tribute to the work done by both bodies and, in particular, to Córas Tráchtála who dealt with the overseas export market. Over the 40 years or so of their existence that body developed an expertise that was put to good use on behalf of many manufacturing companies involved in export. I understand — indeed the Minister has confirmed these figures — Córas Tráchtála have been serving something like 1,200 companies. They have achieved commendable success and much of that success in the early years was in North America. I have reason to be conscious of that success in relation to certain products which are very much of an Irish character and of excellent quality.

Tributes were paid in the Dáil to another organisation involved in the export field some time ago, An Bord Bainne, and I would like to add to those tributes. During the 1960s and 1970s they showed what aggressive marketing and product development could achieve for the food industry here. It is relevant at this stage to cast our minds back to that body and encourage the people who will be part of this new body to consider what was achieved in the marketing, development and export of Irish dairy products in that period. It is relevant that today the producers of the raw materials used in those products are protesting outside the House about the constraints being put on their production and the perceived tax on their income.

In 1967 and 1968 Bord Bainne were calling on the milk producers to expand production because of the pressure to meet forward marketing commitments. It was an era of new products and diversification into new milk products was the order of the day. It is surprising when we look back to note that new technology in relation to many of those new products was being tried out in Ireland for the first time. In 1967 I attended a dairy conference in Munich. There was a machine on display there — that is the best term I can think of at the moment — experimenting on the production of long life cream produced by a company in Denmark. We inquired if it was the only machine or prototype in action and we were told there was another, and that it was in Killeshandra. That is an example of what initiative and enterprise could achieve. Long life cream became a well-known product and we were leaders in the market in the early days. New cheeses came on the market, casein, chocolate crumb and a number of other dairy products. Much credit is due to the calibre of the men who were in charge of the board at that time, people like Tony O'Reilly and Joe McGough.

Unfortunately, Bord Bainne being a State-sponsored body was obliged under the rules of the EC to change and become a co-operative and because of that certain constraints were placed on their capacity to export. Of course, that was not the only difficulty. This, again, is a feature that is unique to Ireland and to the character of the Irish people. They found they had to compete and were at a disadvantage because of the action of cooperatives back home undermining and undercutting their prices and what was a pioneering and enterprising spirit died at a cost to the farming community and resulted in job losses in the industry. Intervention became the safety valve and the dumping ground for dairy products. What was a once proud industry and leader in marketing and product development was reduced to the status of beggar at the European table. However, something was proved in that period about the capacity of this country where food production and development were concerned. I am sure the base is still there if the motivation can be recovered to achieve and emulate what was done during that period.

I recommend to the new board to recall that remarkable era of success. Many, people comment on the unique capacity of Ireland to produce quality food particularly in a green environment, yet, we seem to be hopelessly inept at harvesting the obvious potential and benefits in that area.

The Irish Goods Council have provided valuable service to many manufacturers and companies in the home market. At present they are working on behalf of some 800 companies. Both bodies referred to in the context of this Bill have provided a valuable service to Irish companies at home and overseas. They will now cease to exist and a new body will emerge. Regeneration is a good thing and a shake-up can have a very good effect. The staff and leadership of both bodies will amalgamate to form one agency. I hope this will provide an opportunity for a new beginning, that the new agency will have the enthusiasm to meet the challenges they will be faced with and to deliver to the economy much needed opportunities. I am confident the undertaking will be a success. I welcome the Bill and assure the Minister of our support on this side of the House.

I, too, welcome the Bill and wish the new board well. I would also like to congratulate Córas Tráchtála and the Irish Goods Council for all the work they have done over the years. One has only to look at the success of Irish exports in relation to the size of the country to realise they have done an excellent job and have been successful. I am delighted these two bodies have been amalgamated and that there will now be one board which will have specific responsibility for increasing our exports overseas. It is a timely move considering the imminence of the Single Market. There is huge potential for Irish companies to export worldwide. I have no doubt that because of this new board there will be new enthusiasm and initiative to seek new markets.

The objective of the board is "to promote, assist and develop in any manner which the board considers necessary or desirable the marketing of Irish goods and such services as is specified by order". A number of joint initiatives have already been undertaken by the two agencies and have proved very successful. Perhaps I may be allowed to give the House an example.

Recently I was asked, as was Deputy David Andrews, to go to Syria by an Irish company called Tullow Oil to see if we could help them get a licence to drill for oil. I have to say that I was absolutely amazed at the groundwork that Tullow Oil had done in Syria. We were brought to see the Prime Minister and the Minister for Energy. We also saw the person who is closest to the President of Syria and who will probably be the next President.

There is no doubt there was a huge commitment by that company to other Irish companies in trying to help them. When they originally got the licence to drill in Syria — they now have a very successful gas drilling operation there — they brought in, for example, Campbell Catering, an Irish company, to supply all the catering for the company while they were drilling there and they also got them new markets in other countries through other oil companies. They now have a very successful and expanding catering operation to oil companies and companies who are drilling offshore and onshore around the world. That was done with the help of another Irish company.

They also brought into that part of the world a company that is often given as a great example, Ballygowan Water. They told me a very good story. When they brought some people from the media over to Syria to show them the operation one small boy came up the road dragging behind him an empty bottle of Ballygowan. All the media people thought it was some kind of set-up, but it was not. They had asked Ballygowan to export to Senegal and they now have a fairly good market there for Irish mineral water.

The point I am making is that I believe there is great potential for Irish companies working abroad to help other Irish companies to develop there. I discussed this at length with Tullow Oil. I would like to think that perhaps this new board would talk to companies like that and see how they could help to obtain orders and improve the exports of other companies. I have no doubt that there are many companies who have a huge commitment to Ireland who would help in this way and perhaps the Minister could ask the board to look at how this could be developed. Undoubtedly there is a lot of goodwill on the part of companies like Tullow Oil to help other Irish companies who are not exporting.

Undoubtedly we could export very much more, but because we are an island nation on the western edge of Europe we have a certain problem with expanding into the mainland of Europe and the rest of the world. We believe we are cut off and sometimes it is hard for us to get free of that mental block. We should be confident of our ability to tap into all these markets and to believe that our goods are as good as those of anybody else. This is something the new board could do. In fact, I think that Irish companies are beginning to realise that if they want to expand they must expand abroad because the Irish market is so small. We have only 3.5 million or four million people and to expand to any large size you must go abroad. Any help this new board can give in that area would be very beneficial.

There has been great success by Irish companies. After I left school I worked for a company called Urney Chocolates which, unfortunately, is no longer there. It was taken over by HB — the Grace Group at the time. When I left it was up and running and it was doing very well. I went to the United States and after I worked in the United States I went down to Central America and I always remember this. I was in a very small town in Central America, I went into a shop and there was a bar of Urney chocolate, so I decided that we were not so bad in getting our goods to overseas markets and that our goods are as good as those of anybody else.

I would like to wish the board well. I hope they will listen to the points I have made, because I know that there is a lot of goodwill in Irish companies to help other Irish companies to expand. I have no doubt they will be successful. I welcome the Bill. I think it is very timely and is necessary in the present economic circumstances and the way the world is changing economically.

I would like to express my thanks to Senators Staunton, McCarthy, Howard and Eoin Ryan for their very worthwhile contributions to this legislation. There have been a number of questions raised to which I would like to respond.

First, I will refer to some general issues that concern all of us. There has been some reference to the job crisis but the new body, An Bord Tráchtála, will contribute in this respect. The connection is fairly simple. Sales create jobs. If a company can increase its sales it will inevitably have to increase its production, distribution, invoicing departments, etc. Even with highly mechanised modern production techniques a company which is expanding its production will need more machines and more people to man those machines. The task of An Bord Tráchtála will be assist Irish companies increase their sales and hence increase their jobs.

This does not mean that An Bord Tráchtála will be going out doing the sales work for the companies. That is something the companies must do for themselves but to achieve sales a company must first of all identify that there is a market for its products. There is no point in producing goods and then belatedly, creating a demand for them. That is putting the cart before the horse. The market must first be identified and then the goods produced to fit the existing demand but that is not the whole story. When the market is identified and the right goods produced they must be got into the marketplace. That, in itself, is no easy task in this highly competitive age when the costs of creating brand names are so enormous and the costs of market entry are prohibitive to the small suppliers.

The new agency, An Bord Tráchtála, will be charged with assisting companies with all aspects of the twin tasks of identifying markets and selling into those markets. Of course, it has the advantage of the tremendous record of achievement of both the Irish Goods Council and Córas Tráchtála. We have at the moment in the region of 5,000 manufacturing companies in Ireland and only 2,500 of those companies are in the exporting field. There are enormous opportunities for the other companies, who are small but who will have an opportunity to expand, to develop into overseas markets. As Senator Ryan said, there are just over 3.5 million people in the home market plus the North of Ireland, which is a very important home market as well as far as Irish products are concerned.

One of the first areas for companies to expand into would be the United Kingdom which has quite a good market of over 50 million. It has the advantage of having Córas Tráchtála offices and now An Bord Tráchtála offices located in London, Manchester and Glasgow. The services that are available to companies are enormous and I would encourage all companies to avail of the services which An Bord Tráchtála will be providing. When the board is established I will request them to contact all the manufacturing companies in Ireland and to bring to their attention the enormous opportunities that are available abroad and the services which will be provided by An Bord Tráchtála at 21 overseas offices.

Senator Staunton made a point about the effect of overseas competition on the rag trade, as it is known — the clothing industry. I think the Senator made a valid point. I am glad to say that the Irish fashion industry is fighting back. With the valuable assistance of Ballygowan, the Irish Goods Council have organised a major promotional campaign with the Irish fashion industry called "Look to Your Own". This is not a "Buy Irish" campaign; such a campaign could not be supported by a State agency under EC law. It is an example of a sector of Irish industry fighting back and saying: "Look at us, look at what we are doing. If you like what you see then, and only then, buy our products." This is a good example of the combination of the skills of the Irish Goods Council and Córas Tráchtála who will now be in the position to bring a small company right through to the exporting stage without changing the personnel who have been dealing with those companies.

Senator Staunton also praised the executives of the existing organisation Córas Tráchtála abroad. He commented on their very lonely life, that often they are the only Irish representative in that country. It is right and proper that the Senator should comment on the services which were made available to him above and beyond the call of duty at weekends and so on. Indeed, I have also found, dealing with staff of Córas Tráchtála abroad in different locations, that they have been extremely efficient, know-ledgable about the country to which they are assigned arranging major contacts and contracts for Irish companies and being available seven days a week to assist Irish exporters to avail of the opportunities which exist abroad. I would like to thank Senator Staunton for his kind words, which will be conveyed to the Córas Tráchtála staff who are present here today.

Senator Staunton also referred to full employment in Finland and other Nordic countries and asked why Ireland could not do that too. One of the reasons Ireland has not been so quick off the mark in this respect is that in the past we did not invest sufficiently in marketing and in science and technology, two key areas, to encourage economic growth. The new investments being made in these areas with the support available under EC Structural Funds are steps in the right direction. It is right and necessary that we invest more in technology and innovation to get new products on the market and that we invest in the marketing of these products.

Deputy Staunton also spoke about concentrating support for indigenous industry. That is primarily what this Bill is all about. The reality of foreign owned industry is that most, though not all, have their marketing functions outside this country. That is a feature of our industrial policy which must be and is being addressed. But the role of An Bord Tráchtála would be to concentrate on the small and medium sized Irish firms which lack the marketing capability to compete effectively. If the Senator looks, for example, at recent CTT annual reports he will see that Córas Tráchtála has focused on some 1,200 native firms and it is increasingly tracking the performance of these companies on an annual basis.

Senator McCarthy mentioned some of the achievements of the agencies in his region. Indeed, he also had the opportunity, when Minister for Science and Technology, to bring about the amalgamation and creation of Eolas. I can assure the Senator that the good work of the agencies is not confined to the south Tipperary area; indeed they have a nationwide activity.

I would also like to place on record my admiration of the company mentioned by Senator McCarthy, M.F. Kent of Clonmel. I worked with Gus Kearney and his team on many occasions and I have been to the project in Barcelona mentioned by Senator McCarthy. This company points the way in which we would like to see all Irish companies progressing. They are enormously successful, employing, as Senators stated already, 4,500 people worldwide. I have been to their plants and outlets in different locations and I must say that they are providing tremendous opportunities for young Irish people both at home and abroad — indeed, the company is going from strength to strength.

The role of Córas Tráchtála and of the new Bord Tráchtála was mentioned by Senator Howard. It is different from that of Bord Bainne, as the Senator has acknowledged but of course, Córas Tráchtála have done a great deal of promotional work in the food area. They successfully organised the Irish stands at major food shows like the Berlin Green Week and the SIAL show in Paris. Córas Tráchtála have also developed a general logo, "Food Ireland", which seeks to highlight the environmental advantages which Irish food products particularly enjoy. I must say that Bord Bainne are continuing their tremendous work for the export of dairy products. I have had an opportunity of working abroad with the marketing people in Bord Bainne, particularly in Japan and other markets which they are developing. They have created the Kerrygold range of products which are marketed worldwide and have had tremendous success, particularly in Germany.

I am always very anxious to have the co-operation which exists between our State agencies dealing with overseas promotion and exporting: CBF, Bord Bainne, Bord Iascaigh Mhara and, of course, Córas Tráchtála. I found that Córas Tráchtála in a sense have had a co-ordinating role, particularly in their expertise at shows throughout the world where they have been in the position to provide back-up services. They have gained great knowledge and experience in designing the stands at different shows like the Book Fair in Frankfurt and the Green Week in Berlin. That expertise, the in-house design capability of the new Bord Tráchtála will be available from the Bord Tráchtála staff.

Those are the items Senator Howard mentioned, which I think are very important. They are matters which may be taken for granted at times, but, coming from the background of the design industry, I have been impressed by the innovation of the design provided by Córas Tráchtála. This was shown recently at the television industry show in Cannes. The stand — provided at relatively economical rates — was well located and well designed to show the best Irish products in the area of the television and entertainment industry.

Córas Tráchtála have a very wide brief and that brief will be continued by An Bord Tráchtála. They have an enormous remit. I am delighted at the response of Senators McCarthy, Howard, Staunton and Eoin Ryan, who has also pointed out the success of Irish indigenous companies. The support of both Houses of the Oireachtas for An Bord Tráchtála is particularly satisfactory for the staff, who were present at debates both in the Dáil and the Seanad. It is very encouraging because it takes great teamwork, and that is the kernel of this new organisation. Both organisations being amalgamated, the Irish Goods Council and Córas Tráchtála, have excellent track records; and it is a reflection of their success that the Government have decided as policy to establish one organisation amalgamating both staff and personnel.

I want again to reassure the Seanad that there will be no staff losses as far as we are concerned. We need all the staff of both organisations working together in this new organisation. It is a logical step as far as I and the Government are concerned. The Irish Goods Council have tremendous expertise in the Irish market, serving over 800 indigenous small companies. They will now be in a position, with the expertise gained by Córas Tráchtála to work with those companies towards the exporting scene. That is why I am delighted to commend this Bill to the House and to thank Senators again for their contributions, for their co-operation and for their generous comments, which will be well received by both organisations.

We face enormous competition abroad and the opening up of 1992 presents us with great opportunities but also major challenges both at home and abroad. We are very conscious of the challenges which face us in the future but with the abilities we have as a nation in the selling and marketing fields we can overcome our peripheral location in Europe, we can overcome the handicaps we have, and build on the strengths which are undoubtedly available to us. At the moment there is another debate in the Dáil in relation to the agriculture situation and the CAP reforms. We must intensify our marketing of all Irish products, particularly in the food area. We must sell the quality products which we produce here at home. We have the opportunities which must be exploited and exploited now, not in the future.

Question put and agreed to.
Agreed to take remaining Stages today.