I thank Senator Kiely for his kind opening comments. It is always a pleasure to come back to the Seanad. Members here have a more even spirited way of conducting debate than in the Lower House as is probably fitting to the House's name.
Neodata Services Inc. has its headquarters in Boulder, Colorado, and provides comprehensive, integrated out-sourced services to organisations using direct marketing. These services include magazine, book and product fulfilment, product warehousing and distribution, telephone customer service and marketing database management. Neodata came to Limerick in 1969 to establish a back office data processing operation engaged in magazine subscription for the US parent. It did so without State aid of any kind; the internationally traded service sector did not qualify for State aid at that time. During the following 25 years Neodata expanded to three other midwest locations — Newcastlewest, Kilmallock and Listowel.
Following the announcement by Neodata in November 1993 of their intention to consolidate to their headquarters in Colorado, the company and IDA Ireland worked vigorously to prevent the potential loss of 400 jobs at Neodata's Irish operations. These efforts resulted in a proposal for grant assistance which would save 260 jobs. The proposal was approved by the Government last October.
Neodata Ireland has broadly restructured its operations during the last 18 months to better provide a more cost effective service in an increasingly competitive global market. While the company has been particularly successful in identifying and securing new business for its offices in the midwest, a drop in demand for the services provided at Kilmallock has resulted in the introduction of a voluntary redundancy programme at that office. The programme, which involved 35 redundancies, has been fully subscribed and will be implemented over the period 2 June to 13 October, 1995.
In addition to the voluntary redundancies sought, Neodata will also be implementing a programme of temporary layoffs during the summer months. Approximately 19 permanent staff will be affected by these layoffs, which are not expected to last beyond September. These layoffs are necessary due to a delay in securing contracts and to seasonal variations, which are normal during this time of year. Neodata Ireland is currently in negotiation with a number of European based multinationals concerning business for its Irish operations, and it is expected that one or more of these contracts will be signed during the next three to four months, thereby providing further job opportunities at Kilmallock and re-employing the 19 staff temporarily laid off.
The restructuring at Kilmallock does not impact in any way on Neodata's other offices at Listowel, Newcastlewest and Limerick city. Indeed, employment levels across these latter offices are currently at 180 and may rise slightly during the year as work volumes increase. The net effect of these changes, therefore, is to consolidate Neodata's employment levels across all its offices at approximately 215 permanent staff.
Neodata Ireland has been working very closely with IDA Ireland in seeking new business opportunities. The negotiations to which I have referred are currently at a sensitive stage, and the potential clients required confidentiality prior to formal contracts being signed. The lead time associated with entering into a contractual agreement with new clients is between nine and 12 months. Neodata are advanced into that lead time with a number of potential clients. However, while they consider the prospects for new business favourable, they are not in a position to offer any guarantees in this regard at this stage.
The importance of Neodata to the town of Kilmallock is appreciated, not least by the company itself. Indeed, I understand that the managing director of Neodata, as the Senator has acknowledged, has extended an invitation to the appropriate public representatives, including TDs, Senators and councillors, to attend a meeting with Neodata management on 2 June to keep them abreast of all the latest developments. Although they are faced with some short term setbacks, I believe that there are longer term opportunities available and it is Neodata's intention to pursue these opportunities with determination. I can assure the Senator and the House that in these efforts they will continue to have the full support of IDA Ireland.