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Seanad Éireann díospóireacht -
Thursday, 15 Jul 1982

Vol. 98 No. 11

Sugar Manufacture (Amendment) Bill, 1982: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I was speaking about the necessity to encourage diversification, with particular reference to the machinery manufacturing sector. I have already dealt with that sufficiently and I wish to turn momentarily to the food processing sector. It was, unfortunately, in this particular sector that the difficulties arose which have already been aired in this House this evening.

In relation to food processing, it is essential that the most modern packaging, presentation and sales techniques be employed. The consumer has very quickly realised that the visual impact of a particular product has tremendous significance—perhaps unfortunately also — and as a result many of the items which are now displayed in our shops, stores and supermarkets, which are manufactured and processed outside the country, are far more eye-catching and far better presented than many of the products we process at home. As the previous speakers mentioned, it is ridiculous to expect the people in the countries to which we export to support Irish produce if we have not the patriotism and the will to support our own industries.

This is particularly relevant in the case of processed foods. There are quite a number of foods being processed at present. We have many varieties of peas imported which have been very well marketed in this country, which were in competition with our own products and whose sales, I would contend, are gaining in momentum. We have a number of firms processing potatoes. Again, they were successful in cornering a substantial slice of the Irish market before we recognised that there was a possibility there for Irish processing to get in on the act, and to give employment at home, and, indeed, to produce a better product. It only remains, again, for the sales and the presentation techniques which are already in evidence in other countries to be adopted by Irish manufacturers in order to ensure the success of diversification in this area.

The Tuam sugar factory has already been referred to. I believe it has been a vibrant social and economic entity in the past and I see no reason why it cannot continue to be that in the future, provided that the raw materials are produced and made available to us. At the same time I hope that the modernisation of the plant which is necessary will be undertaken to ensure that the company can continue to operate in Tuam on a viable basis.

There has been some criticism of the Irish Sugar Company this evening, and it is justified, but I would not like it to go out from this House that we are here just to criticise. The firm has given long and faithful service. It has come upon rather hard times, in fact extremely hard times it would appear from the continued losses, but we should have sufficient confidence in Comhlucht Siúicre Éireann to ensure that the funds are made available for it to continue in operation, to expand its operations and to diversify where possible. As long as supplies of sugar beet are available for any of its factories we should ensure that they are allowed to operate and, at the same time, we should make sure that the funds which we hope are incorporated in the present Bill are made available to the company.

I have not been fortunate enough in the past to find you in the Chair on the odd occasions I have spoken and I would like to take this opportunity to congratulate you on your election and to wish you every success. I would also like to welcome the Minister to the House.

An Leas-Chathaoirleach

The Senator is very kind, and I thank her.

I welcome this Bill because it will enable the Irish Sugar Company to correct this situation of under-capitalisation which has been forced on it for a variety of reasons. I feel that this Bill will give it a new lease of life. Since 1976 the company has spent over £50 million in modernising its factories, reducing its oil dependence and increasing output. Unfortunately, during the past years the company has been unable to meet the full quota of 182,000 tonnes allocated by the EEC and this is an area on which a lot of emphasis will have to be placed. The farmers will have to meet the responsibilities in this direction. It is important that we meet our quotas, because when the Minister goes back to negotiate these quotas in the future if we have not met them it will make the task very difficult for him. There has been a very good response to this appeal in the Tuam area. I am glad to say that more than 7,000 tonnes have been grown over the past year, an increase of 25 per cent and over two years an increase of 50 per cent.

Since the company was founded 50 years ago it received £5.5 million from the State, a pittance when one considers the employment the company is giving in the area. Three thousand people are directly employed in the factories. Again, a very large number of people are involved in haulage, contracting, selling fertilisers, seeds and so on and 7,000 farmers are growing beet for the factories. So one could say that this £30 million is a very sound investment in our economy.

The Sugar Company are indeed going through a rough patch at the moment. Even with the injection of this money, things will be tough for the years ahead. Basically their problem is inflation, which leaves them no longer as competitive as they should be. The factories have been modernised, there has been replacement machinery and new silos have been acquired. This now leaves the company ready to tackle the years ahead with confidence. Except for the last two years, the company has consistently shown a profit and I believe that with this sort of help they can do so in the years ahead.

In the line of technology the Irish Sugar Company has developed in this country the only successful beet harvester perfected for Irish conditions and adaptable to small and large acreages. It is sad to think that the people involved in this project are now working on the factory floor because of the shortage of funds. I hope that this money will get to them immediately so that they can get on with the good work.

As a housewife I urge the Minister to cut down on the importation of French sugar which we find in our supermarkets at the moment. I feel that there is no need for this sugar to be coming into the country. We are producing excellent sugar ourselves, and I certainly intend to buy Irish sugar.

Erin Foods are making quality products and are giving employment to our people. The price is very competitive and the products are certainly good and appetising. I feel, however, that they are not getting the prominence in supermarkets that they deserve. I would like to see some sort of promotion launched to increase the sales and give them a greater slice of the market.

I welcome this Bill because I appreciate the difficult situation the company find themselves in. Like everyone else, I am concerned that the Sugar Company can continue to carry on their activities in the interests of the workers and the farmers. The importance of having a major sugar industry and an expanded food industry in the country cannot be over-emphasised. I am delighted that this money is forthcoming and I am sure it will be put to very good use. I welcome the Bill and sincerely hope it will be put into operation immediately.

On a point of information, may I raise one small point.

An Leas-Chathaoirleach

The Senator may ask a question.

I understand that a total £30 million has been allocated to semi-State bodies in 1982. We are talking about an allocation of £30 million to the Irish Sugar Company. I am aware that other semi-State bodies are looking for funds, so my question is where will this money be found or will the other semi-State bodies have to go without funds?

I should like to express thanks to the Senators for their welcome of this Bill and to those who contributed to this debate. I would also like to thank the Senators who welcomed me here for the first time as Minister of State.

Senator Hourigan referred to the use of the £30 million. I have said that the Sugar Company is to submit a plan to improve its efficiency and I will be looking closely at that plan to see that it is effective and workable. Of course the company is already modernising its plants but it is having to do so on money borrowed from commercial lenders. This Bill will remedy that situation. It is up to the company to give me its plans for improved efficiency before I allocate the £30 million. I have not earmarked any of the £30 million in advance. In relation to Senator Hourigan's remarks on earmarking funds for particular factories, there is a misunderstanding here. None of the capital to be advanced is earmarked. Thirty million pounds is not project expenditure or grant aid. It is the price the State is paying for the assets that increased shareholding in the company constitutes.

Senator Hourigan was also concerned about beet acreage and while urging all concerned to make every effort to reach our A quota of 182,000 tonnes, he mentioned that this has never been achieved. In fact, the A quota has been filled on two previous occasions, which goes to prove that it is an objective which can be realised and which has been realised in the past.

Senator Hourigan also referred to the Erin Foods fraud. I can tell him that the circumstances of the fraud have already been established by an independent firm of auditors specially engaged by the company for that purpose. Their report, furnished to the board in June 1980, made recommendations on improved financial control, and these have been implemented by the company. The firm of independent auditors who investigated the fraud were satisfied that no one in the company, other than the two persons charged, were involved and no suspicion should attach to anyone else.

It is clear, as Senator Hourigan has said, that Erin Foods, which I regard as an integral part of the Sugar Company, is having difficulties in competition. The Government believe that food processing has a future within the Sugar Company and that the measure now before the House will help to make it more competitive. To Senator Cranitch I would say that there is a need to improve productivity in our sugar factories and that is the aim of the company's ongoing modernisation programme. It is one of the reasons why the present Bill is needed. I, too, look to the company to reduce our dependence on food imports.

I should like to take up a point made by Senator Durkan. I mentioned earlier that the legislation imposes limits on the company's freedom of action. I also mentioned that in an ordinary company financial restructuring would have begun to take place some time ago. I then said that because of the State's known commitment this was not a problem for lenders. What has made the difference is the heavy losses of the past two or three years and the Joint Committee on State-Sponsored Bodies took account of this as soon as it became evident. I think it is incorrect to impute lack of foresight to the management in this matter. The facts do not bear out that imputation.

Senator Hannon was concerned, naturally, with the points made by previous speakers as far as food processing is concerned. I would like to assure Senator Durkan that there is no problem about the availability of the £30 million. It is there and it will be allocated provided the plan to be submitted by the company is satisfactory.

I am glad Senators have welcomed this Bill.

Question put and agreed to.
Agreed to take remaining Stages today.
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