Seanad Éireann debate -
Wednesday, 24 Mar 1999

Vol. 158 No. 15

Adjournment Matters. - Plant Closures.

Ms O'Meara

I am raising on the Adjournment the need for the establishment of a task force in the aftermath of the announcement by C.M. Offray Limited of its decision to close its plant in Roscrea, County Tipperary, with the loss of 140 jobs. This announcement was made a week ago last Friday. Despite the fact that it was expected, it has caused a major shock in the town, as I am sure the Minister appreciates. Last January the company announced it was seeking a partner in order to draw up a new set of targets as it had been haemorrhaging, so to speak, for a number of years. It now owes its parent company many millions of pounds.

C.M. Offray operated in Roscrea for 20 years. It has struck me very forcefully that a number of my school colleagues – as I was educated in Roscrea – and neighbours and friends are employed there, having completed the leaving certificate just over 20 years ago. Those are the jobs being lost and these are the people, whom I know personally, facing unemployment. It is an understatement to say it is not easy for them. This morning I received telephone calls from some of them who still feel, almost two weeks on, a sense of loss, depression and anxiety about the future. They are worrying about who may do something for them and what they can do themselves. The announcement of a task force in that context would be critical. A plan of action must be drawn up to replace these jobs.

This closure took place against an extraordinary background in north Tipperary, where there is no job growth despite unprecedented national job growth. North Tipperary is not sharing in that growth if one goes by the figures – our employment statistics are static. Limerick and the Shannon region is growing at an unprecedented rate, but north Tipperary is not. I do not underestimate the difficulty in finding an industry to replace Offray, and the fact that north Tipperary is not included in the Objective One status region will not help either. The importance of a task force cannot be overemphasised. On the same day as the Offray announcement, the Clonmel task force announced its success in attracting a large number of jobs to that town from Guidant and that did not go unnoticed in the northern part of the county. Not only is a task force needed, it is essential.

In establishing that task force, I urge that the backdrop of job growth should be taken into account. The Government should focus on the need to generate job growth in the entire county. North Tipperary is a relatively small geographical area, and the impact of job losses in Roscrea is felt throughout the region and not just in the town.

In choosing leadership for this task force, the Government should go beyond the local authority. We do not have leadership from our local authority. I am not saying anything new; I have said this before and I have said so locally. We do not have a proactive approach from our county council, and I am concerned about where a proactive approach will come from to replace these jobs, to ensure future economic growth for north Tipperary and to ensure we share in the current economic success. I ask the Government to look beyond the local authority and to ensure that the Shannon Development organisation plays its role in replacing this industry. The Government should also ensure that FÁS is used to its utmost potential in assessing current skills and bringing in new training.

I am aware that the Tánaiste may visit Roscrea in the near future, and I hope that the Minister of State will give me a time and place for that visit. I hope the Minister of State also outlines who will be in the delegation she meets and I will be urging that workers are included in that delegation. There is a deep sense of loss and anxiety among the workers, and they deserve to know what their future holds. They deserve to know that we and the Minister are doing our best, and they deserve to know that Roscrea's future is secure and that the economic climate is better than it looks now.

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

The Tánaiste has an appointment and cannot be here, so I am taking this matter on her behalf. We share the Senator's concern and disappointment at the recent decision by C.M. Offray to close its Roscrea plant. C.M. Offray and Son was established in Roscrea in 1979. It is a subsidiary of the US-based C.M. Offray and Son lncorporated, which employs 5,000 people at four locations in the United States and one location in Argentina. It is engaged in the manufacture of ribbons, mainly for the lingerie, clothing and floral markets.

Due to the collapse of Offray's European market, the Roscrea plant has experienced substantial losses over the past three years. While these losses have been subsidised by the company's US parent, unfortunately the US operation is also experiencing heavy losses, with increased pressure from Chinese ribbon producers.

Over the last six months, IDA Ireland has been working with Offray in Roscrea attempting to find a strategic partner. However, having sustained such substantial losses for the last number of years, the company has reluctantly concluded that this course of action is no longer a viable option for it.

The company has cited high transport costs and long turnover times as the reasons for the closure, as 95 per cent of its product is exported to the EU. Without a significant domestic market for its product, the company does not benefit from the economies of scale enjoyed by its EU competitors. The IDA will continue to actively promote the Roscrea facility through its European offices, and the 78,000 square foot factory on a six acre site will now be vigorously promoted through the IDA network worldwide.

The Tánaiste is very conscious of the effect which the closure of this plant will have on Roscrea, and she intends to visit Roscrea in the coming days to meet with worker representatives and the management of the company. She will also announce the establishment of a North Tipperary Enterprise Initiative in response to the unfortunate announcement of the closure of the Offray ribbons plant which will seek to maximise the potential of the area.

While the support agencies play an important role in helping industry to develop and expand, much depends on the external trading environment and the competitive intensity of the market segment in which a company positions itself. C.M Offray operates in a market segment which has been affected by intense competition, and the company has found that it cannot compete with cheaper products on the market from low cost producers in southeast Asia.

In light of the closure of Offray's operation in Roscrea, the Tánaiste has asked the agencies to intensify their efforts to facilitate additional investment, job creation and job maintenance in the region. In addition, FÁS will do everything possible to assist redundant workers through initiatives such as training and retraining to enhance the employees' prospects for re-employment.

C.M. Offray has undertaken to co-operate fully with IDA Ireland in marketing its facility. Since the closure was proposed, five interested parties have made serious inquiries about the facility. Of these, two have visited the site and another has had discussions with senior Offray personnel. As yet, however, no proposals have emerged from these inquiries.

The Seanad adjourned at 9.25 p.m. until 10.30 a.m. on Thursday, 25 March 1999.