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Dáil Éireann díospóireacht -
Wednesday, 12 May 1999

Vol. 504 No. 5

Written Answers. - Contract Moulding Industry.

Michael D'Arcy

Ceist:

55 Mr. D'Arcy asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the difficulties in the contract moulding industry which accounts for 3,000 manufacturing jobs and is under severe pressure due to excess capacity which has resulted in redundancies and short-time working in a number of companies; and if she will make a statement on the matter. [12247/99]

Nora Owen

Ceist:

79 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment if her attention has been drawn to the difficulties in the contract moulding industry which accounts for 3,000 manufacturing jobs and is under severe pressure due to excess capacity which has resulted in redundancies and short-time working in a number of companies; and if she will make a statement on the matter. [12342/99]

I propose to take Questions Nos. 55 and 79 together.

The current difficulties facing the contract moulding industry are a consequence of signifi cant changes which have occurred in the sourcing policy of global computer companies. These companies have been demanding a high level of integration of their suppliers and the ability to supply on a global basis. The recent shift within the marketplace in favour of global supply agreements has undoubtedly presented a significant challenge to local suppliers in this sector. The Irish sub-supply network has been successfully built up over the past 20 years and has experienced considerable change since 1996. The Irish based supply companies which have proved to be most vulnerable in these circumstances are those with a high dependency on a single customer or those currently sharing contracts with other global suppliers.
The recent entry into the Irish marketplace of new overseas companies has also presented a new competitive challenge to the established local supply base in Ireland. These new corporate suppliers have sought to establish a manufacturing base in Ireland in order to meet the requirements of the major computer manufacturers already located here. While continued international growth in the computer sector in 1998 resulted in increased orders of 20 per cent approximately for local suppliers, overall supplier capacity has increased by 200 per cent in both the plastic contract moulding and metal stamping supply sectors as a consequence of the arrival of these new entrants in Ireland.
I should point out that IDA does not make its normal range of grants, i.e. capital and employment grants, available to these new entrants to the country. However, IDA is prepared to offer limited grant assistance to these new companies if this is justified by training needs and if it encourages the companies to locate in priority areas.
While it is difficult to predict future sourcing patterns, it is inevitable that some contraction in the local supply base will occur as business is switched to global suppliers and, consequently, those suppliers whose competitive position is most vulnerable will be unable to sustain their present operations at current levels.
Officials of my Department recently met with representatives of all the development agencies to discuss the strategies required to respond to these difficulties. The industrial development agencies, and in particular Enterprise Ireland through its national linkage programme, will continue to monitor the situation and to work with established supplier companies on an individual basis to try to offset any negative impact and to help them in the restructuring and refocusing of their businesses. In this context Enterprise Ireland is actively searching, through its overseas office network, for technology partners for Irish based mechanical suppliers who exclusively offer contract moulding or metal stamping as a service to their customers. I am satisfied that significant progress is being made on this front.
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