Adjournment Debate. - Company Closures.

Tuesday, 23 April 2002

Dáil Eireann Debate
Vol. 552 No. 3

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Mr. J. Brady: Information on Johnny Brady  Zoom on Johnny Brady  I thank the Ceann Comhairle for allowing me to speak of this matter on the Adjournment. It was with regret that the town of Kells learned that Complex Tooling & Moulding Limited would cease operations at its Kells facility at the end of June. The company, formerly known as Southborough International Limited, has been engaged in the manufacture and assembly of custom-built precision sheet metal enclosures for the information technology and electronics industries in Kells for the past 26 years. Owing to the significant economic downturn and fall in demand within this industrial sector and migration to the more cost-effective regions of the world, the board of directors of Complex Tooling & Moulding Limited has announced that the company will cease its Kells operations on 30 June 2002. This is bad news for the town of Kells. The company made a considerable contribution to the local economy. Employment peaked there in 1998 with more than 270 employees. Currently the factory employs a work force of 50.

This company operated from a top-class, modern facility and I am confident that other industries will find it attractive. I am appealing to the Tánaiste, Deputy Harney, and to the Minister of State, Deputy Treacy, to act immediately to try to find an alternative enterprise for this facility. The loss of 50 jobs in a town the size of Kells is a major blow and every effort must be made to find alternative employment for those losing their jobs. Kells is growing very fast. It is ideally located in the middle of the North-South business corridor. It has an excellent supply of development land and skilled labour. We are fortunate to have the highly successful, progressive and fully-serviced Lloyd business park on the Cavan Road. It was here that Smurfit Press set up its printing operation last year and I am confident that further employment will be found here soon. In the meantime no stone must be left unturned in finding replacement employment for the workers who will be losing their jobs in the coming months.

I thank the Minister of State, Deputy Treacy, his officials and all the different agencies for meeting with representatives from this company over the last 12 months when it found itself in difficulty. I could not thank him half enough for his courtesy towards those people and the effort he has put in to try to find not only a replacement but a company to go in with this one. Unfortunately, that was not forthcoming. As we come to [900] the end of this Dáil term, I also thank Deputy Treacy personally for meeting all the people in difficulties that I have brought here to the Dáil over the last number of years. He was always available to meet those people. I hope he will be back here in the same capacity or in some other ministerial capacity in the next Government.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy): Information on Noel Treacy  Zoom on Noel Treacy  I thank Deputy Brady for raising this important matter. I fully share his personal concern and disappointment about the recent decision by CTM Southborough Limited to cease production at its metal fabrication facility in Kells with the loss of 50 jobs. The company has stated that the closure is due to the significant economic downturn and fall in demand within its industrial sector and the migration of production to lower cost regions of the world. The company will cease operations by 30 June 2002. CTM Southborough Limited employs 50 people in a metal fabrication facility in Kells, County Meath. It was purchased in 1998 by Complex Tooling & Moulding Incorporated of Boulder, Colorado, a plastics speciality company to the electronics industry.

There were major plans for the Kells facility, including the installation of plastic injection moulding equipment, to enable Kells to supply integrated components to the electronics industry in Ireland and elsewhere in Europe. The investment never materialised and CTM was left to fend for itself outside the core business of its parent, which was plastics. It is understood that CTM's parent company is also in a tight financial position and cannot provide any financial or other support to its Irish subsidiary. A number of CTM's largest customers in Ireland previously reassessed their global position and signalled their intention to deal only with suppliers who could supply integrated components on a global basis. CTM was not a global supplier and consequently a significant proportion of its business was lost. IDA Ireland has advised that over the past two years the strategy of the major own-equipment manufacturers such as large computer manufacturers has been to obtain their metal and plastics products from global suppliers at the lowest possible cost. Suppliers in China and the Far East can supply globally at a much lower cost than Ireland.

Over the past few years, every effort has been made by both IDA Ireland and Enterprise Ireland to introduce new business to this company. Potential investors in related activities were introduced to the company to establish interest in on outright purchase or joint venture basis. Unfortunately, none of these initiatives resulted in new or additional business for this company. In reaction to the closure announcement FÁS representatives met with the company on 2 April 2002 to discuss the support FÁS could offer the employees. Guidance interviews then took place on 17 April for all employees interested in availing of FÁS services such as skills analysis, jobs [901] placement, guidance interviews and suitable training courses. I understand that 30 employees have requested assistance from FÁS.

FÁS has also advised that another company in the area is seeking to recruit 25 staff and they will be meeting with this company to see if it would be possible to facilitate some of the former employees of CTM. I understand also that the company prepared a profile of the Kells facility and a profile of its staff in July 2001. Subsequently, IDA Ireland forwarded a copy of the profile to all of its overseas offices, who in turn sent the proposal to potential investors on the IDA database. However, the latter months of 2001, particularly since September, have seen a slowdown in business activity, especially within the information and communications technology sector and no new business emerged for the Kells operation. The facility continues to be marketed by IDA Ireland.

There have been a number of positive developments in County Meath in recent times, for example, the announcement in October 2000 by Europ Assistance of the expansion of its customer assistance centre in Navan. The company currently employs 100 people and the expansion will lead to the employment of an additional 140 people by the end of 2005. Welch Allyn Medical Devices has doubled its work force to 50 people over the past two years and has also broadened its activities in Navan to include higher value customer support and product development work while maintaining the core manufacturing element of the business. The company relocated to a new facility in the IDA business park in Navan in 2001. In addition, IDA Ireland is continuing to develop the Navan business park. The IDA has reached agreement with local property developers to refurbish Athlumney House in the business park and to provide a total of 29,000 sq. ft. of office space.

Enterprise Ireland recognises the essential need for balanced regional economic development and its regional structure reflects its commitment to deliver a proactive response to regional needs. The mid-east office of Enterprise Ireland ensures that the special needs of businesses are addressed by regionally based development advisers who provide a proactive approach to meeting client needs. In adopting this approach, Enterprise Ireland is putting increased effort into and emphasis on assisting businesses to improve and sustain their competitiveness, utilising the considerable expertise of its development advisers who work directly with the client companies.

Enterprise Ireland is also working with its client companies and other key players in the region to implement its regional development strategy in County Meath. This includes developing the competitiveness and export potential of existing businesses, enhancing the operating environment for business by developing closer links between the third level sector and indigenous industry and by working [902] with key players to address the telecommunications and other infrastructural needs of companies, and supporting an increased level of new high-potential start-up companies. I assure Deputy Johnny Brady and the House that the industrial development agencies will continue to market County Meath for investment and will make every effort to secure alternative employment for the workers affected by this closure as quickly as possible.

I thank the Deputy for the diligent way in which he has addressed this issue over the past year. It is no fault of his that we were unable to save the company, which was seriously affected by the international global downturn, despite our collective efforts.

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