Dáil Éireann - Volume 304 - 15 March, 1978

Ceisteanna—Questions. Oral Answers. - Tuam Factory Closure.

16. Mr. Donnellan asked the Minister for Finance the reasons for the closure of the Erin Foods factory at Tuam, County Galway; and if he is aware of the grave discontent in the area because of this decision.

Mr. Wyse: The processing of potatoes at Tuam has been uneconomic for a number of years and heavy losses have been incurred during the past seven years. This has been due partly to difficulty in procuring adequate supplies of raw materials at reasonable prices and partly to the very severe competition which the products have been encountering abroad. The decision to cease production has been taken by the company only after very careful consideration of all relevant factors.

However, the company intend, when the present processing season ends, to commence a major engineering industry in its place. There will be no displacement of the existing permanent staff of 65 which in fact will be increased by 33 extra full-time workers. The increased employment will, in fact, add £90,000 per annum to the company's payroll at Tuam. Furthermore, farmer growers affected by the decision will, where appropriate, be offered beet contracts. The company will also assist regular contract growers where difficulties are shown to exist with potato equipment.

As regards the second part of the question, I am aware that the company's decision has caused disappointment among the growers and other interests, but I am satisfied that it is the correct one in all the circumstances.

Mr. Donnellan: The Minister says the decision was taken by the Government? That is what he read out.

[1610] Mr. Wyse: By the company.

Mr. Donnellan: By the company, yes. Is the Minister aware that Government representatives in the area were unaware of the decision?

Mr. Wyse: I am not responsible for people not being aware of facts.

Mr. Donnellan: Was the Minister personally aware of the decision prior to the announcement?

Mr. Wyse: I understand that the employees' and the growers' representatives had been fully briefed by the company on the new plans for the Tuam factory and the company have indicated that there is no grave discontent as suggested by the Deputy. After all, there is further investment in that factory.

Mr. Donnellan: If there is no grave discontent I would ask if the Minister is aware of a protest meeting that took place last Sunday week attended by a few hundred people? Surely that is discontent in the area? Is the Minister further aware that there was no consultation whatsoever between the company and the growers and the workers or the farmers who invested heavily in machinery in that area for the production of this crop prior to the taking of the decision?

Mr. Wyse: I do not know what the speaker is aware of in things of that kind. This company was not viable, and the Deputy's Government were fully aware of that over the years.

An Ceann Comhairle: Next question.

(Interruptions.)

Mr. Donnellan: The plant stayed open while we were in Government and not alone that but we ensured the future of the beet industry there by spending £1 million on the modernisation of the plant.

An Ceann Comhairle: Question No. 17.

Mr. Donnellan: Can the Minister tell me why the Irish Sugar Company——

[1611] An Ceann Comhairle: I will not allow any more supplementaries on this.

Mr. Donnellan: ——did not consult with these other interests before they made the decision?

Mr. Wyse: I have already said that the company's decision has caused disappointment to certain people but at the same time——

An Ceann Comhairle: I am not allowing further questions.

Mr. Donnellan: You may allow the Minister to reply.

Mr. Wyse: Everybody concerned was fully aware of the position.

Mr. Donnellan: Who was aware? Were you aware yourself of the decision?

An Ceann Comhairle: Deputies must address the Chair when asking questions, and the Deputy should resume his seat while the Minister is answering.

Mr. Donnellan: May I get up again now?

Mr. Killilea: May I ask a supplementary question?

An Ceann Comhairle: Make it short.

Mr. Killilea: Did the Minister get a breakdown of the total money being invested this year by the Irish Sugar Company in Tuam on this manufacturing industry?

Mr. Donnellan: That has nothing to do with it.

Mr. Killilea: Deputy Donnellan talked about a protest meeting at which he was made stand by the wall and shut his mouth.

Mr. Donnellan: You did not turn up for it.

(Interruptions.)

An Ceann Comhairle: Order, please. Deputy Bruton, one last question.

[1612] Mr. Donnellan: Deputy Killilea, as usual, is completely irrelevant.

Mr. Bruton: Could I ask the Minister if the Government requested the company to reinvestigate the possibility of, in the first place, maintaining the potato grading operation in Tuam on a viable basis by ensuring that they deal with graded potatoes and only those which can be used for no purpose other than processing as it is done in Tuam; and, secondly, of engaging in further processing to enable them to sell a branded product rather than an unbranded product which they are selling?

An Ceann Comhairle: Those are two separate questions.

Mr. Bruton: Could I ask the Minister if he is aware that if these steps had been taken there would possibly have been a viable plant in Tuam for potato processing?

An Ceann Comhairle: Question No. 17.

Mr. Kelly: I have one supplementary question.

An Ceann Comhairle: We are having no further Galway questions.

Mr. Kelly: Can I have one supplementary?

(Interruptions.)

An Ceann Comhairle: I am calling question No. 17.

Mr. Bruton: What is the answer to my question?

Mr. Wyse: I am answering the Deputy's question. Half a million is being invested.

17. Mr. Kelly asked the Minister for Finance whether he regards the closure of the potato processing plant at Tuam, County Galway, for the reason of unreliable potato supply, as an event completely out of harmony with any strategy for agricultural and industrial development appropriate to this region and, in general, with the policy of expanding the food processing sector of the economy.

[1613] Mr. Wyse: As indicated in my reply today to Deputy Donnellan the proposed closure of the potato processing plant at Tuam is not entirely due to the effect of unreliable potato supplies over the years. In view of the history of loss-making at the plant and of the fact that employment is being safeguarded, and in fact increased, by the proposed switch to an engineering plant, I do not accept the implications in the Deputy's question.

There is no change in the Government's policy of expanding the food processing sector of the economy where viable projects are identified.

Mr. Kelly: Does the Minister envisage that the processing of potatoes would be a viable project anywhere in the country if it is not viable in east Galway or are we to write off the potato-processing industry entirely from this moment?

Mr. Wyse: Referring to the factory there was £1.38 million of a debt over the years. I do not know what the Deputy calls viable.

Mr. Kelly: I want to get from the Minister a statement of his opinion.

An Ceann Comhairle: The Deputy will appreciate that this is a general question whereas the one on the Order Paper is specific.

Mr. Kelly: If you, Sir, will do me the honour of looking at the question I have put down you will find that I am asking a general question in regard to the bearing which our national economic planning policy has on this event. I put down the question originally to the Minister for Economic Planning and Development and it is not my fault that it is being answered by the Minister of State, Deputy Wyse. Is it not an appalling reflection on the outlook for economic development in this country that we cannot process potatoes, the product for which we are world-famous. Is there any other part of this country in which he sees a future for this industry?

Mr. Wyse: A number of Deputies are trying to make publicity out of all this. We should look at the whole [1614] situation. There is a viable industry established there and the company concerned are prepared to help the farmers as far as possible.

Mr. Kelly: Referring to the industry which is going to take the place of this one, I would like to extract from the Minister a view—of regret or anything else he likes—on the apparent find implicit in this development that potato processing is not a viable part of the food-processing industry in general, notwithstanding that every speaker from the Government side——

An Ceann Comhairle: We are not having any further speeches. I am calling question No. 18.

Mr. Wyse: I would like to answer.

(Interruptions.)

An Ceann Comhairle: I am calling Deputy Callanan for a last supplementary. Would Deputies please cease interruptions?

Mr. Callanan: As the potato is the only crop for which there is not a common agricultural policy yet but for which there will probably be one in the next few years, was it not the wrong time for the company to decide to close down? They are not viable at the moment but they may become viable.

An Ceann Comhairle: A question, Deputy.

Mr. Callanan: That is the question I am asking. Will the plant and machinery be left there in case the processing of potatoes becomes viable? We feel it is the wrong time for them to close down.

Mr. Kelly: Could I ask the Minister——

(Interruptions.)

An Ceann Comhairle: Order.

Mr. Kelly: Would the Minister for Finance think of urging the Irish Sugar Company to consider growing the potatoes they need for themselves even if that resulted in a “breakeven” situation rather than a profit?

[1615] Mr. Wyse: We are talking about a specific industry in Tuam. The industry was not viable. I have already told the House that there is a £1.38 million debt running there. The matter of potato processing in other parts of the country is a different question.

Mr. Donnellan: Could the Minister give me a breakdown of the £1.38 million——

(Interruptions.)

An Ceann Comhairle: Question No. 18.