Dáil Éireann díospóireacht -
Thursday, 11 Oct 2001

Vol. 542 No. 1

Adjournment Debate. - Job Losses.

Mr. Deasy

The extreme west of Waterford is deprived in terms of employment. There are three small towns – Tallow, Lismore and Cappoquin. Cappoquin has a poultry industry which is giving very satisfactory and gainful employment. However, the other towns are left without industry. The closure of Cadena is a disaster for Tallow. It might be said that 68 people is a small number of employees, but it was an invaluable source of local employment.

Just over two years ago, there were two factories in Tallow, Flair Plastics Ltd. and Cadena. At one time Cadena employed as many as 140 people while Flair Plastics Ltd. employed 80 people. People from the locality have no option but to travel to the neighbouring towns of Youghal, Fermoy and Dungarvan to seek employment. However, these towns have had their own difficulties in recent times. This week SCI Ireland Ltd. in Fermoy announced 120 lay-offs while Stafford Miller Ltd. in Dungarvan announced a large number of lay-offs, on top of the 400 job losses three years ago in Waterford Foods. People in Tallow have a great difficulty seeking employment. Not only is there no employment in their own town, but the three towns in which they would naturally seek employment are also experiencing serious difficulties.

I ask the Tánaiste to use her good offices in conjunction with Enterprise Ireland to ensure the Cadena factory premises is utilised by another industry as soon as possible. It is a considerable premises, and I hope the Tánaiste will recognise the area as being an unemployment black spot and that she will set up a task force to ensure gainful employment is secured for the area. I thank the Tánaiste for agreeing to meet local politicians tomorrow when she is visiting the area.

Mr. O'Shea

The announcement last Tuesday by Imperial Tobacco Limited of the closure of the

Cadena Cigar business is an enormous blow to the rural town of Tallow, County Waterford. Some 68 jobs will be lost. In the census of 1996 Tallow recorded a population of 1,048 people. There is no live register figure for Tallow, but the combined figure for the four west Waterford towns of Cappoquin, Lismore, Tallow and Ballyduff is 270. The 68 additional unemployed people will increase the figure for the four towns by 25%. However, even though all the employees do not come from Tallow, the factory is located in the town.

Cadena was officially opened in Tallow in 1997, and in 1999 had 150 employees. Its product is sold in the low-price sector in Holland, which has become increasingly competitive. The company has also stated that the business has incurred losses for the past three years and is forecast to make a similar loss next year. From September 2002, the implications of the recent EU tobacco directive will mean the company will require large health warnings in black and white on its products, requiring additional labels being added to the wooden box packaging, and the company sees this as adding further to its costs and therefore its losses.

The company acknowledges the excellent co-operation of the Tallow workforce and, as stated by Ms Marie Butler, the SIPTU official for the workers in Cadena, Tallow, the employees did not pursue considerably higher rates of pay, as paid at Imperial Tobacco's Dublin plant, as their contribution to keeping the company's cost base competitive.

An equitable compensation package and a date of closure are now to be agreed between the trade union representatives and the company. In a letter to me, the company has stated it will do everything it can to help find alternative employment for the employees. A process of up-skilling and retraining is required for the Cadena workforce and a task force needs to be set up to include all the major players, the union, the company, Enterprise Ireland, FÁS, the county enterprise board etc. to ensure that this devastating blow to west Waterford is put right as quickly as possible.

Minister of State at the Department of Education and Science (Ms Hanafin)

I thank Deputies Deasy and O'Shea for raising this matter on the Adjournment. The closure of Cadena Ireland will be a big disappointment to the people of Tallow and the surrounding area. I fully appreciate the concerns, which the redundant employees and their families are experiencing. I know the Tánaiste wants to assure the Deputies that the full services of the agencies of her Department will be available to respond to this and in particular to find alternative opportunities for the workforce affected by redundancies.

Cadena Ireland Limited was a privately owned Dutch company that originally operated at Conna, County Cork. Cadena was acquired by the Imperial Tobacco Group UK in 1996 and subsequently relocated to a greenfield site in Tallow, County Waterford, to cater for an increase in output. A new factory of 3,000 square metres was opened in October 1998.

Employment increased from 62 in 1997 to a peak of 150 in June 1999. Later that year the company lost a significant order and reduced numbers to 100. Numbers have been slipping gradually since due to automation and productivity improvements. Recent employment had reduced to 68.

Unfortunately, the plant was never profitable, due in part to much higher than anticipated overhead costs and loss of productivity due to the complexity of the packaging operations. Imperial Tobacco invested over £1 million in the plant for additional productivity and new product introductions in the past two years. However, the main problem was the declining market for own-brand cigars in Holland.

Imperial Tobacco announced a planned restructuring of its worldwide manufacturing and supply chain operations on 9 October 2001. This included the closure of the two Cadena plants, one in Ireland and one in Holland. I understand the company has yet to agree a redundancy package with the workforce. Enterprise Ireland is scheduled to meet the company to explore potential alternative opportunities for the workforce and the facilities. This will take place as soon as possible. The full services of FÁS will also be made available to the workforce and FÁS will meet the workforce on Thursday next.

As regards industrial activity generally in the Waterford area over the past five years, 2,860 new jobs were announced in IDA Ireland-assisted companies in Waterford city and county. Planning permission has been received for a new 75-acre flagship IDA technology park, with 200,000 square feet of modern office buildings, the first phase of which will begin shortly.

Mr. Deasy

It is closer to Cork than to Waterford.

Ms Hanafin

I am sure it will be of benefit to both. The Strategy Waterford policy, which the Tánaiste announced on 23 February 2001, aimed at developing Waterford as a dynamic centre for business and industry in the 21st century, involves the establishment of a group representing all relevant interests. This special focus on Waterford will be a major benefit to all areas in the county.

In addition, IDA Ireland's south-east regional office is located in Waterford city and this is soon to be expanded with a team of ten key executives headed by a senior manager. This team will have responsibility for some of IDA Ireland's critical target sectors for investment. It is envisaged that this new presence and focus will drive growth across the region and allow the city to become a magnet for development in the south-east.

Enterprise Ireland has approved £385,000 towards the cost of providing a high-tech community enterprise centre in Waterford and this is expected to open before the end of the year. The establishment of Nypro Waterford, with Enterprise Ireland support, manufacturing electro-mechanical components will lead to the creation of 400 jobs over the next four years.

I am confident the efforts of the industrial development agencies under the remit of the Tánaiste, including the county enterprise board and local business interests, will see Waterford continue to develop as a county offering excellent opportunities for working and living into the future.