I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, to the House.
Adjournment Matters. - Industrial Development.
I thank the Minister of State for coming here. I do not often raise matters on the Adjournment. The reason I tabled this motion was that it is of particular importance to Kilkenny and to the south-east area. My motion states: "The need for the Tánaiste and Minister for Enterprise, Trade and Employment to make a statement on the extraordinary lack of investment in industry in Kilkenny, particularly in the light of a recent company closure there and the further loss of 45 more jobs."
The company I am referring to is Kilkenny Textile Mills. The company has not closed down but it shed 90 jobs last year and it has told its workers that it will stop production in June. The company has been a very good employer and it provided excellent working conditions. It was a model of how a company should be run. There was good co-operation between the workers, management and trade unions. It is a pity that it will close down.
Kilkenny is an industrial base which should be targeted by the IDA. It is a suitable location for anyone who wants good infrastructure, a good base and a well-educated workforce. It has all the elements that we preach about abroad, yet we still cannot get State moneys for the area. We need that support in order to top up the jobs that already exist in the service industries with solid industrial jobs.
People think Kilkenny is a prosperous and beautiful place to visit and people would like to live there. Unfortunately, we have not secured industrial jobs for Kilkenny. Any jobs that have been created have been as a result of a growth in the indigenous industry. That does not mean that there have not been other successes. The mines are a success but we need natural resources in order to have a mine.
The largest port in Ireland is located at Belview. It is referred to as the Waterford port but it is based in County Kilkenny. A few spin-off industries have started up and they are very welcome in the Kilkenny area.
There has been only one case of inward investment in Kilkenny town and that has been a company which makes ball bearings. It is an extremely important company which does an excellent job.
Kilkenny Textile Mills is located at a well-built industrial facility which was built specifically for the manufacture of towels. As a result of bad decision-making in America and Europe the industrial estate flopped because it did not have a sustainable tenant. Since then a number of indigenous companies have set up and they are doing quite well. But Kilkenny is not getting any inward investment. There is an urgent need to provide jobs in the city, not just to replace the 45 jobs that will be lost in the coming months. There are rumours around Kilkenny about the loss of a further 90 jobs in the next three or four days and, no doubt, rumours can become fact.
Many people do not realise that the average income in the Kilkenny area, at £7,483, is the second lowest in Ireland. The lowest is in a Border area. Kilkenny can facilitate a huge range of industries, from high tech computer enterprises to heavier enterprises. However, there is not one high tech industry in Kilkenny. I blame the IDA for that. The Minister must look at this.
Kilkenny, with its central position and surrounded by third level institutions, although there is no third level establishment in Kilkenny, should have been able with the IDA's assistance to get inward investment. Unfortunately, there is no one from the IDA resident in Kilkenny – it is dealt with from Cork. It is not feasible for an office in Cork to respond to Kilkenny's needs. We were told by the IDA and others that Kilkenny is too small and that the bulk of industrial development will take place in growth areas such as Cork, Waterford and Limerick. As a result, Kilkenny is falling down.
We have not done well in terms of foreign investment. I blame that solely on the fact that the IDA has not worked with the people in Kilkenny, who have tried everything, including setting up KIDCo, which is a development company. It has built a 27,000 square foot advance factory and new advance factories are located on an adjoining site. However, they are not being used. The infrastructure in Kilkenny is great. However, the response from Government, in terms of foreign investment, has been dismal.
We in Kilkenny do not tend to say we are setting up a taskforce. However, we see that this has been done in other places around the country. When one looks at the statistics for investment and labour participation, Kilkenny is well below the national average in terms of employment by industrial sector, when one takes out agriculture, which is on a downward trend. We are well below the national average for manufacturing industry. We are above the national average in agriculture, forestry and fishing. We are below the national average for professional services and other industrial services. We are above the national average for building and construction and below it for transport and communications. We are also below the national average for public administration, water and gas. We are above the average for mining because we have two mines. People are not employed in the IT sector in Kilkenny because we have no IT business. Significantly, Kilkenny has the lowest take up of third level education in Ireland, although there are huge first and second level education resources in Kilkenny. This is one of the reasons we lack investment.
We rate highly in terms of the criteria for industrial development and foreign direct investment, particularly roads, airports and telecommunications. The improvement of the N9 route will help. However, Kilkenny has not done well in terms of industrial development and foreign direct investment, when compared with the national position or that of the south-east region. I do not want to take Kilkenny out of the south-east region, which has not done well in the past.
What is going to be done to develop industrially based industry in Kilkenny which will provide the jobs that are needed, so that we will not have to depend solely on the current service industries, such as food and hotels? We need investment from abroad. I ask the Minister to work hard, with KIDCo, the Kilkenny county enterprise board and Kilkenny County Council, to see what can be done to provide those very necessary jobs. There has been a dismal picture of job losses in Kilkenny over the past number of years. No jobs have been created in Kilkenny, apart from those in indigenous industries, in the past two years.
I thank Senator Lanigan for raising this important matter. I am very aware of his personal concern for the well being of Kilkenny over many years.
Kilkenny Textile Mills, a wholly owned subsidiary of Santens NV, Belgium, was established in Kilkenny in 1983, following the closure of the Fieldcrest operation. The company manufactures griege cotton yarn for sale, mainly to its parent company. Efforts to sell to third party customers have been largely unsuccessful. At its peak in 1985, Kilkenny Textiles Mills employed 185 people. However, due to a decline in demand, employment dropped to 80 people by 1998. In January 1999, the company announced that, as part of an overall restructuring plan, it planned to reduce its workforce by 40 people. This development was as a result of competitive pressures from towelling producers in the Far East.
However, the company has experienced ongoing difficulties and the decline in demand for the type of yarn that Kilkenny Textile Mills produces has led to the situation whereby, on 3 April 2000, the company announced that the Kilkenny operation is to close. This closure will be completed by mid-June and will result in 45 redundancies.
FÁS has been in contact with Kilkenny Textile Mills' management and has offered to put the following services at the disposal of the company and its workforce – interviews to be conducted with all pending redundant persons, access to FÁS job vacancies and courses will be provided, information and guidance will be provided on all FÁS interventions, for example, training programmes, schemes, courses and so on and, in consultation with the company and the workforce, FÁS will consider the provision of special training programmes.
The overseas clothing and textile industry in Ireland has been in decline, with employment reducing from 6,700 people in 1998 to 4,170 people currently. The underlying factor in this continued employment decline is a lack of competitiveness, particularly in the clothing sector where labour costs are high compared with alternative locations in north Africa and eastern Europe. It is anticipated the industry will continue to decline over the next three to five years, as companies continue to relocate to lower labour cost locations to remain competitive.
Recent closures in the sector highlight the fact that, notwithstanding the recent success of the Irish economy, retaining competitiveness in an international context remains a continuing challenge. Ireland needs to focus its efforts on attracting industry in sectors where we can effectively compete in a global economy. That point was well made by Senator Lanigan. The emphasis must be to concentrate on upskilling and retraining the workforce to meet the demands of this changing environment. The recent budget decision to establish a major new national training fund, amounting to £120 million, in 2000 is an indication of the Government's commitment in this regard.
In addition, the Government is committed to ensuring the most equitable distribution of job opportunities. The development agencies are now strongly focused on achieving this aim, and resources are being deployed to reflect this focus. Over the past year, IDA Ireland has expended considerable effort on reviewing its role and on planning its future strategy to ensure it continues to meet national needs in 2000 and the following years.
I assure Senator Lanigan I will convey his views directly to the IDA. He had some very direct messages to deliver on that subject in regard to Kilkenny. However, it is not merely a question of jobs dispersal. The agency is seeking to bring a better mix of industrial sectors and higher value industries to locations around the country, in particular to locations that have not seen the emergence of modern industries. The agency's new strategy also addresses the need to increase the value and sustainability of overseas companies already established or about to establish in Ireland.
The development agencies continue to emphasise Kilkenny for new employment opportunities. The 43 acre prestigious business and technology park has been developed by the IDA in Kilkenny city, with two advance buildings, one a 25,000 sq. ft. manufacturing facility and the other a 20,000 sq. ft. high quality advance office facility. Both of these buildings have been completed and are being actively marketed for overseas investment. The IDA will also actively market the Kilkenny Textile Mills facility for a replacement industry. I assure Senator Lanigan that the development agencies will do everything possible to try to secure alternative employment opportunities for the Kilkenny Textile Mills' workers.