asked the Minister for Industry and Commerce the present position concerning the market entry and development scheme as announced in the Government White Paper on Industrial Policy; the number of firms participating; and the assistance available under the scheme.
Ceisteanna—Questions Oral Answers. - Industrial Marketing and Development.
5.
(Limerick East): The market entry and development scheme is designed to assist companies with the potential of achieving significant growth in their exporting capacity and which are financially constrained to break into new markets or undertake major developments of existing markets. The scheme assists exporters with some of the expenses involved such as travelling, overseas research, advertising and promotion, staff, agents' accommodation and warehousing which arise in connection with breaking into a new export market.
The unique features of the scheme are that it operates on the basis of a ministerial guarantee in respect of loans raised by participating firms that, if at the end of a specified period, increased sales have not been sufficient to cover the full repayment of funds advanced, no further repayments will be required. In addition, the scheme allows for repayments of the guaranteed loans by way of deferred payments so as not to damage the company's cash flow in the earlier years.
During 1985 CTT approved seven projects under the scheme and this involves the guarantee of loans to a total value of £1.6 million. These projects also qualify for assistance under normal CTT grant schemes to a level of £0.58 million. The seven projects span markets from the US to Europe and embrace products as diverse as processed foods, upholstery fabrics and engineering goods. CTT would hope to approve a further 15 projects in the course of 1986.
It was expected when the scheme was initiated that perhaps up to 200 firms might or could benefit from it. Would the Minister not agree that seven projects in the year from that total identified as being capable of benefiting is a small number which perhaps would indicate that the scheme is not being given the full commitment that it should get?
(Limerick East): The figure of 200 companies arises from an assessment by CTT that there would be so many companies in the country who would have the potential for achieving significant growth in export markets but who are financially constrained. This scheme was brought in then and those companies are the target for the scheme, but it was introduced initially on a pilot basis. It is proposed now that it continue on a pilot basis so that we can have quite a number of companies operating the scheme before an assessment is made. The projection is that approximately 16 firms will be involved in the scheme in 1986 and that would then provide an adequate base for an assessment of the scheme. It is a new scheme. It will work well. In so far as it has gone it seems to be working well but, because of the small number of firms involved in the first year, which was intended to be a pilot year, this scheme was extended on a pilot basis for a second year.
Have CTT taken the opportunity to bring the details of the scheme to the notice of the 200 projects which were identified that might benefit? Has he brought to their notice the question about the deferred payment of the loans which are guaranteed by the Minister? Quite a number of firms would participate if they were aware of the details and the fact that they can get this ministerial guarantee for the loans. Will he undertake to see to it that they are all notified of the details of the scheme?
(Limerick East): Yes, I will undertake to guarantee that they are re-notified of the scheme, but CTT are not in a position yet to do a proper analysis on account of the fact that only seven firms have participated and I do not want to become involved in a commitment to massive expansion of the scheme which could be costly.