I move: That the Bill be now read a Second Time. Deputies will remember that, in the last Dáil, a Bill was introduced, the purpose of which was to facilitate the establishment here of cement-grinding mills. That Bill had not gone beyond the Second Reading Stage when the Dáil was dissolved and consequently it lapsed at that stage. Prior to the dissolution, however, I had announced in the House that, in consequence of certain representations received in the Department of Industry and Commerce, we were proposing to examine further the possibility of securing the speedy establishment of a complete cement industry before pushing the earlier Bill further to the Statute Book. Quite early on taking office, we gave attention to the possibility of establishing a cement industry here. It is an industry which has been established in most countries and an industry for which this country is particularly suitable in so far as we have all the raw materials available in abundance. We have also got a growing market for the cement, a market, certainly, which I think would justify the establishment of more than one cement-producing plant on an economic basis.
We found, however, that certain difficulties existed and we originally had the idea of proceeding towards the establishment of the industry in two stages, first, by encouraging and procuring the erection of grinding mills and, secondly, the erection of the clinker plant. Following the introduction of the Grinding Bill in the Dáil, various representations were made by different parties to the effect that it would be possible to establish the industry completely with very little additional loss of time to the delay that the establishment of the grinding mills would cause and we proceeded to examine the information on which those representations were made. As a result of that examination, we have satisfied ourselves that there are firms available which are prepared to finance, erect and operate in this country cement-producing plants capable of supplying all our requirements at reasonable prices. Deputies are aware that this is almost the only country in Europe in which there is a free market in cement. Most of Europe and, in fact, most of the world, is subject to a cartel arrangement. The different markets have been divided up between the producing firms and prices are fixed, generally on a monopoly basis. Those who were dividing up the world for that purpose forgot the Irish Free State and, at the present time, practically all the competition between the firms in the disposal of surplus stocks is concentrated here, with the result that we, at the present time, are enjoying cement from every country at about half the price at which it is available in the country of production.
Cement is being sold here definitely at a loss to the producers. That is, of course, a temporary advantage to us, but it constitutes one of the difficulties in the way of the establishment of a cement industry of our own in so far as we must be prepared to contemplate a rise in cement prices following the establishment of that industry. We have, of course, no reason to assume that a rise in price will not take place in any event, that those who are at present competing here will not come to an arrangement among themselves which will mean that this market will also become controlled.
We, however, believe that it should be possible to produce cement here at least as cheaply as it is produced anywhere else. There are many parts of this country where every natural facility exists for its production. The raw materials are available side by side with transport facilities and other advantages. The machinery that is used in the manufacture of cement will work just as efficiently here as it works elsewhere, and the costs generally will not be higher. There are some people who have gone so far as to say that there is no reason why we could not establish an export trade under various circumstances; but having regard to all the circumstances of the cement industry throughout the world I think that these people are optimists of the first order. However, there is no reason why we should not be able to supply all our own requirements and give a large amount of employment to our own people as a result. We have decided, therefore, not to proceed with the original Bill and have introduced this Bill which is now before the Dáil. The Bill provides that the manufacture of cement in the Saorstát shall be subject to licence. The scheme which we have in contemplation does not appear on the face of the Bill and that is why I think that I should give an outline of the scheme now.
Taking the market for cement in this country to be 200,000 tons per year, we can contemplate the erection of two cement factories, each capable of producing 100,000 tons. That would be an economic unit of production. Up to last year, the market here was growing rapidly, but in 1932, in this country and in every country, there was a very substantial falling off in the consumption of cement. Those who have studied the question say that it arose entirely out of the present depressed conditions of business which have brought about the postponement of capital undertakings and works of one kind or another, and that it is not due to any change in public taste or to any diminution in the utility of cement as a building material or of its usefulness for any other purpose. If the market continues to expand here in the future at the same rate as it did in the past, we shall get to the stage where a third and, perhaps, ultimately a fourth cement factory producing the 100,000 tons can be established.
Our present aim is to have two cement-producing factories. Certain people say that one plant producing 200,000 tons will be more efficient and more economical than two plants producing 100,000 tons each. That is true to this extent, that the cement from the one factory will be cheaper at the factory. Nobody wants it at the factory. It has got to be transported to the place where it is going to be used, and transport costs constitute a very considerable proportion of the price to the ultimate consumer. It is just as important to reduce transport costs as it is to reduce production costs. I think that it will be found that a greater number of our people will get cement cheaper if we have two producing units, more or less adjacent to the big centres of consumption, than if we had only one producing unit adjacent to one big centre of consumption.
Our idea is that, following the passage of this Bill, every person interested in the manufacture of cement here should submit to the Government proposals for that purpose. There will be only one licence issued for a cement factory in the eastern portion of the country, one in the southern portion of the country, and, subsequently, one in the western portion of the country. I am not attempting to define these areas any more closely than that. It gives a general indication of what we have in mind. These licences will be issued to the persons who put up what appears to be the most attractive scheme involving a guaranteed maximum price for the cement. I have every reason to believe that we will get from different parties schemes which will conform to our idea, and it will then be our job to select from them, in respect of each area, the scheme which appears best suited to the area involved and which will give the best cement at the lowest price. When that decision is arrived at, a licence will be issued and the construction will go ahead. I am informed that it will take from twelve to eighteen months to complete the construction of the factory alone. I should like to say further that it is not proposed to delay the examination of applications for licences. Following the passage of this Bill through the Dáil, on Second Reading, my Department will be prepared to receive and examine any schemes on the assumption that the Bill will become law so that, when it does become law, all the preliminary work will have been completed and licences can be issued without further delay and production undertaken at once.
That is the main purpose behind Part I of the Bill. It is also the purpose behind Part II. Part III requires a little explanation. Ordinarily, a company seeking to establish a cement works in this country would have to promote legislation by Private Bill procedure in order to get certain powers. There will probably be the erection of railway sidings involved, perhaps overhead roadways, and other construction work of that kind, all of which would require this power to acquire property, either compulsorily, at an agreed price or as fixed by an arbitrator under an Act mentioned here. That type of legislation is quite common and would have to be promoted here, but it is a slow and costly procedure, and in view of the fact that the public interest would have been already fully considered in relation to each one of these enterprises before a licence was issued, we see no reason why these companies should not be released from such obligation by inserting Part III of this Bill which will enable the Minister, following an inquiry or such examination as is necessary, to empower the licensee to effect this compulsory acquisition of property.
Deputies, in considering that part of the Bill, should bear in mind that these undertakings are going to be big undertakings. When completed, they will constitute some of the biggest industrial undertakings in this country. Each of the factories, which we contemplate will be established, will require the investment of £400,000 or £500,000 capital. In the bringing into existence of industrial organisations of that kind certain powers will have to be taken to ensure that there cannot be any vexatious delays.
Part IV of this Bill also requires explanation. It is quite obvious that, in the circumstances now existing, there is no prospect of getting a cement industry established here unless we are prepared to exclude foreign cement. Foreign cement is coming in, as I have said already, at less than its cost of production—roughly, at half the price available in the country of origin—and the sellers of that cement have shown no hesitation about cutting prices in the most drastic and extraordinary manner in order to get contracts or to maintain themselves in the market. On several occasions recently, information has been brought to me concerning cement contracts available or other opportunities of disposing of cement, of two and sometimes three firms cutting prices in the most extraordinary manner—one below the other and the other going below the first again in order to get sale.
In these circumstances it is quite clear that we cannot get the industry established here unless we exclude foreign cement. On the other hand, we cannot do that by a protective tariff. We may get one unit into production six months before the other and it may not be possible to exclude cement from all parts of the country at the same time. We may only want to exclude it from a particular part of the country. At the same time it would be an extraordinary position if we had in one part of the country Irish-produced cement selling at a higher price than cement in another part of the country where foreign-produced dumped cement was still being sold. It is also a consideration that the price of cement should not jump rapidly. Assuming we can get cement produced here from 34/- to 38/—I will say from 32/- to 40/-, so that firms applying for a licence will have a wide margin in which to vary their figures—and that cement at present is being sold at less than 32/-, or less than the price, at any rate, at which we will be able to get it produced here, we do not want a sudden increase in price. We think that the increase in price should take place gradually over the 12 or 18 months during which the cement factories are being erected and cement continues to be imported. In any event, I see no reason why the benefit of the price-cutting war going on at the present time should not accrue to the Exchequer. Out of public funds a very large amount is being spent at the present time to secure the construction of roadways, houses and other buildings, in all of which cement is used to a large extent, and if foreign countries are insisting upon selling us cement at a loss there is no reason why the full benefit of that reduction in price should be enjoyed merely by those who buy it. If we can get the benefit transferred in some way to the Exchequer then it can be shared out amongst all our people. For that reason, we have devised the system which is embodied in Part IV of the Bill.