Cantillon: All is not Hunky Dory at Largo Foods

Údarás na Gaeltachta yesterday expressed its regret and disappointment at the announcement that Largo Foods is to close its factory in Gweedore, Co Donegal.

The crisp maker is transferring production from the Gweedore facility to Ashbourne in Co Meath, to improve cost competitiveness.

While the regional authority responsible for the economic, social and cultural development of the Gaeltacht may be disappointed at the job losses, the authority also has a financial interest in the company.

It would seem the more competitive and successful Largo Foods is, the more Údarás gains.

After all, Údarás has shares to the value of €1.9 million in the crisp maker. While Údarás has given Largo financial grants to the tune of €500,000 over the past five years, it has also received share dividends of €500,000 from the company.

In February 2012, the Government announced it had given approval for grant assistance of €579,564 by Údarás to Largo’s Donegal facility. However, Údarás yesterday said this money had never been drawn down by Largo.

Údarás was also quick to defend Largo, saying while it has received financial support of €6.2 million from the regional authority over the last 18 years, only €1 million of that has been paid out since 2006. During the same time Largo contributed €60 million to the local economy in wages paid to staff and a lot more in taxes, it said.

Largo Foods, for its part, said it tried everything to make the Gweedore facility work.

In 2011, it announced an investment of €2.6 million in its Donegal facility for extra capacity and new product development. This was in addition to a €2.2 million investment made in 2010.

Largo chief executive Maurice Hickey yesterday said the investment was used to introduce a new range of tortilla products in the UK – Wholly Crunch Tortilla – which turned out to be a failure. The company ultimately had to withdraw the product from the UK and abandon it altogether.