Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 15 Mar 1983

Vol. 341 No. 1

Adjournment Debate . - Drogheda Cement Factory Redundancies .

: Deputy Faulkner has been given permission to raise on the Adjournment the redundancies at Platin, Drogheda announced by Irish Cement Limited.

: Irish Cement Limited announced recently that they were laying off 104 of their Platin work force. The news was a cruel blow, not only to those directly affected by the decision but to the town of Drogheda as a whole and to the district surrounding it. Rising unemployment is a matter of serious concern in Drogheda and this further addition to the numbers of unemployed in the town is frightening. The announcement that 104 workers in Irish Cement Limited are being laid off is especially disturbing, not only because the number of people losing their employment is large, not only because there is already a serious unemployment problem in Drogheda, but because it is happening to Irish Cement Limited.

Irish Cement Limited was established in Drogheda well over 40 years ago by a Fianna Fáil Government. Since then it has always been regarded as Drogheda's major industry, an industry strong and stable as a rock, giving constant and permanent employment. Industries were established in the town since then, many of them giving very good employment, but whatever their merits, Irish Cement Limited stood out as the industry which was, as it were, synonymous with Drogheda, and it was felt that though other industries might succumb to the difficulties facing them, Irish Cement Limited was capable of weathering any storm, as indeed it did in the past. For these reasons the impact of the announcement of the redundancies at Irish Cement Limited was much greater than would have been the case in respect of most other industries, and the feeling of despair which these new redundancies engender runs very deep indeed. The two main reasons given for the company's decision was the recession in the Irish construction industry and the threat of foreign imports. Both are serious matters.

I will deal with the lesser problem first, that of the threat of foreign imports. I met the management of Irish Cement quite some time ago for a briefing on the importation of cement and its effects on sales of Irish cement and on the employment situation in our cement factories and I have been in regular communication with them on the matter since then. I immediately set to work to do what I could to assist the company in this matter so as to counteract the damaging effect of these imports on employment in Drogheda. I made contact with a number of Ministers in the then Fianna Fáil Government and impressed on them the need to protect this vital industry, which not only gave good employment here but which used home based raw materials to produce cement. I must acknowledge that I got full co-operation from the Ministers concerned and particularly from the then Minister for the Environment, Deputy Burke.

As I said in my budget speech, I followed up reports I got about the importation of cement through our ports: mostly smaller ports were involved and I requested my colleagues in the Fianna Fáil Party to co-operate with me in my endeavours to preserve one of our most important home based industries. I must say I got full co-operation from my colleagues when they realised the damage to employment in our cement factories which would result from wholesale importation of foreign cement. I am grateful to my colleagues for that co-operation because it is not easy for any Deputy, especially in times of recession, to concern himself about an industry in another constituency when an offer is made of a half dozen jobs near a minor port in his own constituency by a prospective importer.

My colleagues recognised that a large Irish industry was being endangered by the importation of foreign cement and that the end result would be severely damaging not only to employment in Drogheda but to the economic fabric of the country. I am convinced that the efforts made by me and my colleagues, allied to the strenuous efforts made by Irish Cement Limited, went a long way towards containing the imports of cement to about one third of the total it was thought at one time would be imported.

Eternal vigilance is necessary. We cannot afford to relax for one moment, because we will always have with us those who are only too anxious to make a quick profit at the expense of a home based industry and of employment in that industry. As I said in my budget speech, such individuals will pull out of any area in which they base themselves as soon as it is no longer highly profitable for them to remain, but in the meantime severe damage will be done to a worthwhile industry. I call on the Government to continue to exercise vigilance in relation to this matter as the previous Government did.

Question have been raised why Irish Cement Limited appeared to have difficulty in competing with imported cement. In fairness and justice it must be pointed out that Irish Cement Limited invested enormous sums of money to bring the industry here up to a very high standard and indeed part of their problem arises from the cost of that investment. Of course the workers in Irish Cement Limited are highly skilled and very competent workers and this leads me to question continental costings and whether they are in conformity with the rules laid down by the EEC. This is one area which might bear some investigation.

I now turn to what is, of course, the major reason for the redundancies. It is the state of the Irish construction industry. The dismal condition of the construction industry today is a direct result of decisions by the Coalition Government. The moment I heard of the enormous cutback of £220 million in the Public Capital Programme by the Coalition Government of Fine Gael and Labour I knew that Irish Cement Limited would be in serious trouble. While I am not privy to the factors which were discussed, considered and debated by the management of Irish Cement Limited before they took the decision to lay off 104 workers at Drogheda, I have no doubt whatsoever that the major consideration was the exceptionally severe cutback of £220 million, which the Fianna Fáil Government had included in their Estimates for the Public Capital Programme for this year. I equally have no doubt that when the management of Irish Cement Limited were made aware of these huge cutbacks they knew the writing was on the wall and that this great industry would be shaken to its foundations for the first time in its history.

So it has turned out, and what would have been regarded as impossible only a short time ago, the laying off of a quarter of the work force in Irish Cement Limited in Platin, Drogheda, has now come to pass. Some of the details of the public capital expenditure cuts by the Coalition Government are as follows: telecommunications buildings cut by £18 million; roads and sanitary services cut by £18 million; farm modernisation scheme buildings cut by £10.3 million; housing cut by £13 million; school buildings cut by £5 million; Government construction cut by £12 million and so on.

The cutback in the need for cement is very apparent when we note these cutbacks in money intended for the construction industry by a Fianna Fáil Government but now slashed by the Coalition, in spite, as I said earlier, of the rosy prospects outlined by the Labour Party during the course of the election.

There is, of course, another very important factor to be taken into consideration as well as the cuts I have already mentioned. Included in the total public capital expenditure outlined by Fianna Fáil, when in Government, was a global contingency provision of £120 million. The Joint Programme for Government announced by the Fine Gael and Labour Parties after the election when they were endeavouring to form a Coalition Government stated that areas of defective infrastructure, the tackling of which would provide productive employment, would be identified, and I am now about to quote from the joint programme:

As an immediate measure, a sum of £100 million from the contingency fund in the recently published public capital programme will be set aside to finance works of this kind during 1983.

The recently published Public Capital Programme referred to in that statement is the Fianna Fáil Government's public capital programme. This statement in the Joint Programme for Government was a major selling point at the Labour delegate conference in Limerick, where Labour delegates met to decide on whether they should enter a coalition or not. It is particularly noteworthy, too, that the matter was discussed in Limerick, where there is a cement factory, and I have no doubt that the cement workers in that city were very pleased to note that this £100 million would immediately be made available for the building industry by a Coalition Government, plus the further money in that same Fianna Fáil public capital programme which they must have assumed would also go to the building industry. What must the feelings of those workers be today, what must be the feelings of Labour delegates who voted for Coalition on the strength of the statement in the Joint Programme for Government when they find that not only has the money directly intended for the construction industry been cut, but that the promise of the £100 million from the contingency fund has also been reneged upon.

The recent Coalition budget reduced the capital budget by £220 million, and I quote from the budget statement.

This reduction includes the deferment for this year, 1983, of the global contingency provision, pending the emergence of projects which would meet the necessary investment criteria.

So much for the joint Coalition programme statement which indicated that as an immediate — note the word "immediate"— measure a sum of £100 million would be made available from the contingency fund. The Coalition Government now state that they are deferring any action for this year until they can find projects which would meet the necessary investment criteria. Evidently the loss of employment by 104 workers in Cement Ltd. in Drogheda not to mention thousands more in the building industry, counts for very little in the economic thinking of the Coalition Government.

I took particular note of a Labour Party statement in my constituency after the announcement of the 104 redundancies, and that statement said that the layoffs were inevitable because of the lack of activity in the building industry. The £220 million cut in the Public Capital Programme was made by the Fine Gael Labour Coalition agreement and I want to go on record as saying that had that cut not been made it would be by no means inevitable that the layoffs would take place. The one thing necessary to ensure that Irish Cement Ltd. continue to provide stable employment is to provide sufficient money for the building and construction industry, and that is exactly what we in Fianna Fáil were doing in the Public Capital Programme, £220 million of which has now been cut off the Public Capital Programme by the present Labour-Fine Gael Coalition Government.

How different is the position the cement workers find themselves in today compared with the rosy picture painted for them by the Leader of the Labour Party and the promises of support made to them, when the Tánaiste, Deputy Spring, visited the cement factory at Platin prior to the recent election? At that time Deputy Spring, according to a report of his visit in the Drogheda Independent of 19 November 1982, visited Platin:

"Spring in Drogheda. Visited Cement Ltd., Platin." He said that nobody could claim that Cement Ltd. was not a competitive industry — its technology and plan and its workforce were equal to any in the world.

The Labour leader pledged the full support of the Labour Party in any future Government to assist in any way possible in safeguarding the many thousands of jobs, both directly and indirectly dependent on the industry.

"It would be a serious loss to Drogheda, Louth and Meath and to the country generally if this most valuable industry was placed in jeopardy," Mr. Spring said.

The Labour leader fulfilled that promise, by cutting £13 million off housing, £18 million off roads and sanitary services, £18 million off telecommunications buildings, £10.3 million off farm modernisation scheme buildings, and by not making available the £100 million from the contingency fund which had been promised. I must say that I never found it necessary to visit the cement factory during election campaigns in the past. It had always been accepted by those working in the building and construction industry that the interests of that industry and of its workers were always safeguarded by Fianna Fáil Governments and it had been recognised that building and construction had never been a strong point with Coalition Governments.

When the building and construction industry is in a healthy condition, the employment of workers in Irish Cement Ltd. is secure. It may have been that in the last election some workers thought that this time a Coalition Government might act differently from how Coalitions acted in the past, or maybe they were prevailed on to vote for the Labour Party because of the belief, promoted and propagated by the Labour Party, that where a candidate lived was more important than his party's policy and his party's past record. I will not comment on this. The answer is self-evident.

I will simply repeat that Fianna Fáil stood solidly by the building and construction industry down through the years, and as proof of its attitude Fianna Fáil were providing £220 million more in the public capital budget for this year than the Coalition are now providing. That is what counts. That is what ensures employment in the building industry.

I now demand that the cuts in the public capital programme be restored and the promise made in relation to the £100 million at the Limerick Labour convention be honoured for the sake of those being laid off at Cement Limited in Plattin, for the sake of thousands of jobs dependent on the industry throughout the country and now in jeopardy, and for the sake of the economy of the country generally, and to give an opportunity to Irish Cement to reconsider the position regarding the redundancies.

: I am grateful to have the opportunity to discuss this important matter. I share the concern of Deputy Faulkner about the lay-off of 104 workers at the Platin plant of Irish Cement Limited. These lay-offs were brought about by the relatively serious drop in the demand for cement as a result of the recession. The company carefully considered all options before taking this action. While I am hopeful that the lay-offs will be temporary, I must stress that what is needed is significant growth in the demand for cement to enable the company to increase employment.

Irish Cement Limited are a subsidiary of Cement Roadstone Holdings Limited. They are the only manufacturers of cement in Ireland and they hold the only licence to manufacture cement under the Cement Acts, 1933 and 1962. The capacity of the two cement plants, one in Plattin and the other in Limerick, is 2,000,000 tons per annum and about 930 workers are employed. In March 1981 the Government sanctioned assistance of £12 million towards the cost of £130 million for the modernisation of the Limerick plant. When this plant comes on stream the capacity of the plant will be increased and the overall capacity of the company will be 2,600,000 tons per annum. I mention this because it is important in the context of the capacity of the Irish market to absorb cement products.

In 1981 the market for cement in Ireland was £1.81 million. In 1982 the market fell to £1.49 million and the expected market in 1983 will be in the region of £1.3 million. This means there is an over-capacity for the manufacture of cement in the company. This did not develop overnight with the coming of power of the Coalition Government. It has been developing over the past three or four years. At Platin the company are closing one of their kilns.

The high cost of energy is a factor in production costs at Platin and in Limerick. Energy cost comes to about 50 per cent of the total production cost of cement. The high cost of oil has been exacerbated by the imposition of hydrocarbon tax on the product. There was an imposition of 2p per gallon in 1974. This was raised — and I am sure the Deputy will take note of this — to 7p per gallon in 1980. The date is important. It was reduced by the previous Coalition Government to 4½ in December 1981. I accept that it is a burden on the company.

I am pleased to note that, even though they have more or less a monopoly, the company intend to convert the Platin plant from oil to coal burning. Recently the Government approved grant assistance of £1.8 million for this conversion. This will result in a saving of about £700,000 per annum in energy costs at the Platin plant. This is a significant move by the company and a welcome one. It will go quite some way towards restoring the viability of the plant in the coming years.

The Deputy mentioned imports as being a problem. I accept that imports are a problem, but not necessarily a major problem. Importation of cement began in 1979 and in that year amounted to about 20,000 tons and built up to about 80,000 tons in 1982. That represents a market penetration of approximately 5 per cent. It is a problem, and it arose mainly because of the international recession which resulted in an increased capacity in European cement-making plants. Imports come mainly from the Netherlands, Germany and Spain. Recently the company approached the Department of Trade, Commerce and Tourism in the hope that some form of restriction could be imposed on imports. I accept that it is a difficult situation but we must look at the market in a total context.

I listened with some interest to the economic prognostications of Deputy Faulkner with regard to the present Government. He forgot a central element in economic policy, that is, the insane borrowings of the Fianna Fáil Government from 1977 to 1981. These borrowings did untold damage to our economic fabric. One would have thought that the Government from March to December last year would have had some sanity, but they had no such thing in the economic sense. It is very sad to not that all the income tax collected by the State goes towards paying interest on the national debt. The capricious spending spree by Fianna Fáil has meant that the environment for investment has been seriously damaged. The large amount of vacant factory space now in the hands of the IDA is a direct reflection of the insane inflationary policies of the Fianna Fáil Government.

There is no point in trying to blame this Government who have been in office for about three months for the economic recession. The Deputy knows full well that the Fianna Fáil Government did tremendous structural damage to the environment for industrial investment. Government programmes or Government expenditure will not determine the level of employment or the level of the production of cement. There are other major indicators. One is the environment for agriculture and an other is the environment for industry. Both of those were damaged severely by the Fianna Fáil Government in recent years. It is now the task of this Government to re-establish a healthy environment for industrial investment and agricultural investment. This is a difficult task. The measures taken in the budget have been described as harsh, but they are realistic in the long term. I hope we will be able to control our budget, which the Fianna Fáil Government failed to do. This cannot be discussed flippantly in the House in an adjournment debate. If Deputy Faulkner is looking for a reason for the redundancies in Platin, he should examine the budgetary policy of his own party in Government since 1977.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 16 March 1983.