With your permission, I should like to allow some of my time to Senator Lynch who is concerned with this matter and who has close associations with Kingscourt.
First of all, I want to say that Gypsum Industries Limited is one of the big success stories of Irish industry, having started in 1936 with ten men and less than 10,000 tons of quarried rock, to 500 employees this year and 380,000 tons of rock processed.
Foreign imports of plasterboard are a serious threat to GIL employment. If, for example, imports gain 20 per cent of the Irish market, at least 200 jobs at GIL could be put at risk.
The present threat comes mainly from Spain, with French and East German board currently in the background. Ireland has the highest per capita consumption of plasterboard in western Europe, Spain among the lowest. The Spanish domestic market's annual demand is 2,500,000 square metres. The Epysa factory in Spain has a capacity of around 12,000,000 square metres. The Epysa factory is owned by Lafarge of France, National Gypsum of USA, and Uralita, a Spanish company.
The Spanish Government operate a subsidy system to encourage exports. This amounts to just under 10 per cent of full value, including agents' fees. Spain also maintains import duties of 24 per cent approx. to protect its home market from any counter-trading.
Epysa is represented in Ireland by the Iberian Trading Company, whose principal is Senor Vincente Alonso Vicedo. This man has also been involved in other business ventures in Ireland. The company deals in a range of products, including imported chipboard, hardboard and bricks. These come in through Wicklow harbour on a regular shipping run from Spain.
The Spaniards have adopted a price cutting technique for penetrating the Irish domestic market in plasterboard. Their current offer is GIL's list price less 15 per cent, plus one-quarter of all plasterboard purchased free. This is an effective discount of 40 per cent on GIL's list price.
The Spaniards have also adopted other tactics. When the board was first introduced into Ireland, it was bound with yellow tape and prominently displayed the maker's name and country of origin. Now the Spanish board is being sold unmarked with a green stripe and a plain tape. No manufacturer's name or country of origin is specified and, in that context, the green stripe is particularly effective.
Information that Iberian Trading's representatives are making this offer has been confirmed by individual merchants throughout the Republic, including the following areas: Dublin city; Dublin county; Cork; Galway; Wexford; Clare; Kerry; Limerick; Laois; Carlow and Kilkenny. The same information has been received from trading organisations representing 46 builders' providers in 20 counties. Some have already purchased Spanish board, others are thinking about it. In a shrinking, recession-hit market, merchants are vulnerable to such tactics.
GIL board is subject to price control and all increases for the last five years have been approved by the Prices Commission as fully justified against rising costs. GIL is the sole manufacturer of plasterboard on this island, and has been primarily responsible for the development of the large-scale usage of gypsum products in Ireland. However, despite energy and electricity prices significantly higher than in the rest of Europe, gyptex board is not expensive when compared with the prices currently obtaining in other European countries. For example, the domestic prices in sterling equivalent per 100 square metres apply to the following countries: Germany, 97.68; Holland, 93.15; France, 88.60; UK, 89.59; Republic of Ireland, 91.82; Spain, 85.30; Spanish board on offer in Ireland 61.21.
The Spanish domestic price is slightly cheaper than average European price levels. This may be due to the artificial nature of the Epysa plant, with its mainly export orientation. For example, a low Spanish domestic price could considerably complicate any claims of dumping against that country. However, from the forementioned table it can be seen that the Spanish board on offer in Dublin is a full 30 per cent cheaper than the equivalent Spanish domestic price. This, by the EEC definition, is dumping.
GIL has invested millions of pounds in equipment in the last decade, and currently intends to maintain this programme. Planning permission is being sought for a new open cast mine, which should guarantee gypsum reserves beyond the end of the century. Other major multi-million pound investments are currently under consideration.
The real nub of the matter is that the Republic of Ireland has home demand which, for many industries, roughly equates to the output of one medium-sized, efficient, manufacturing plant.
Due to the deepening recession in the Republic, the situation is now finely balanced but, currently, GIL can still maintain a three-shift, five-day week, with full employment for its labour force at optimum efficiency levels, by supplying the Republic's domestic market and exporting to the North. Therefore it can be seen that even a small erosion in market share could lead to reductions in manpower and/or shifts. There would be a corresponding rise in production unit costs, and this would reduce export competitiveness, with consequent fall in sales, leading to further lay-offs, and so on. This spiral is difficult to reverse once in motion and would almost certainly have an adverse effect on future investment intentions.
The home market holds the key to competitiveness and, therefore, to a stable and properous future for any company. Gypsum supplies the cement industries north and south of the Border. The dumping to which I have referred is well orchestrated and not a haphazard approach.
There is a serious danger that the price structure will be destabilised, which would result in a serious loss of employment. In one year Gypsum Industries Limited pay approximately £1 million for electricity, £2.4 million for PRSI & PAYE, and a further £6.4 million in wages. Gypsum Industries are concerned with this situation. They ask for, and are entitled to, parity and fair play, but to get this it is vital that the Government would act in this matter and act now.