Dáil Éireann díospóireacht -
Tuesday, 19 Nov 1991

Vol. 413 No. 1

Adjournment Debate. - Proposed Closure of County Cork Cheese Factory.

Mr. G. O'Sullivan

It is intended to close the Rathduff cheese making factory on 20 December next with the loss of almost 70 jobs. This cheese making plant which has been in operation for almost 30 years has produced a first-class commodity which has won awards for quality and perfection of product. The success of this plant has been due in no small way to the workforce who have given sterling service to the company for over a generation. Many full-time and temporary workers used their skill and expertise in the manufacture of a product which has won acclaim throughout the world. The decision to close such a plant with the loss of almost 70 jobs and invaluable expertise on the basis of rationalisation is surely shortsighted, particularly in the present climate where the manufacture of food products is probably one of the most important areas for growth and job creation.

The closure of this invaluable plant will have a devastating effect not just on the workers and their families but on the entire area. Areas such as Whitechurch, Grenagh, Breen, Donaughamore, Carrignavar, Blarney and Mourneabbey will all suffer in the process. The communities which have been built up in the area over the past 30 years will be seriously affected. Young people and school leavers will be denied an opportunity of work and will be forced to emigrate. The knock-on effect of such a closure will be detrimental to various businesses such as local pubs and small shops that are dependent on the plant for survival. Indeed, the effects of the closure will be felt far and wide and Rathduff will become a ghost village.

Last June 170 jobs were lost in Western Digital in the Dublin Hill area of Cork which is a stone's throw from Rathduff. An additional 240 jobs have been lost in this plant as of this evening. There is the prospect of another 60 job losses a few miles down the road before Christmas. The constituency of Cork North Central has been devastated by unemployment with unemployment levels of 75 per cent and 80 per cent in some areas.

Last year the workers at this plant were informed that an alternative industry would be bought in an attempt to save the jobs at Rathduff. I believe there has been no news yet about an alternative industry despite the fact that an American firm recently showed interest in the plant. I should like to avail of this opportunity to appeal to the Minister, taking into consideration the grave implications the closure of this plant will have on the community, to examine the situation in conjunction with the IDA and any other relevant bodies with a view to keeping the plant open until such time as an alternative industry is found so that an area already crippled by unemployment and emigration can be given some hope for the future.

Minister of State at the Department of Agriculture and Food (Mr. Walsh)

I should like to thank my colleague, Deputy Gerry O'Sullivan, for raising this matter. I endorse what he has said about the workforce in the Rathduff cheese factory. Over the years these superb workers built up a fine name for themselves and the product they produced.

It is understood that Dairygold has decided to discontinue the manufacture of cheddar at its Rathduff factory. Approximately 65 people will be affected, about half of whom were seasonally employed. Unions representing the employees were informed of this decision on 15 November. Regrettably no alternative enterprise could be found for the plant. However, Dairygold has indicated to the trade unions its flexibility and willingness to find alternative employment within the society for the workers from Rathduff. A successful redundancy package already agreed with the trade unions in the context of amalgamation will be available to those who do not wish to avail of offers of alternative employment from the society.

At present the Irish dairy sector includes almost 40 plants which are licensed to process milk. Since accession to the European Community the industry has developed into a modern, high-technology industry. Our success can be gauged, in particular, by the record export levels achieved by the industry which reached a peak of almost £1.483 billion in 1989. However, prior to the recent developments in the sector, the processing structure of the industry had remained virtually unchanged for many years.

The position of the Rathduff cheese factory within the context of the amalgamation of Ballyclough and Mitchelstown Co-ops must be viewed as part of the rationalisation process which the Irish dairy sector is currently experiencing.

Until recently emphasis in the industry had been on investment in plant and equipment in order to process continually increasing milk supplies. However, the introduction of the Community's quota system in 1984 required a fundamental change in approach by the industry. The key aims of the industry must now include the rationalisation of their processing facilities and the development of both their product range and market outlets.

The ICOS in their 1987 document A Strategy for the Irish Dairy Industry recommended the establishment of three milk processing units. Similarly, the IDA and the Department of Agriculture and Food in their paper A Future in Food, also published in 1987, stressed that the future prosperity of the industry lies in rationalisation.

The Irish dairy industry has to achieve the economies of scale necessary to compete in the post-1992 market. The heavy reliance on the intervention outlet for both butter and skim milk powder underlines the vulnerability of our industry and emphasises yet again the need for change and expansion of our product portfolio. Such expansion can only be achieved in the context of a rationalised and efficient industry with the scale to achieve results in the main consumer markets for dairy products. The general record of the Irish dairy industry to date, with a few notable exceptions, indicates how difficult a task this can be.

The closure of the Rathduff factory has to be judged in this context. The reorganisation of the industry now taking place should, in the medium-term, maximise employment opportunities in a more competitive processing structure within the industry. In view of current pressures on the entire industry, it has to be accepted that existing structures need to be flexible and dynamic to take account of the ever more competitive climate worldwide.