Conspiracy of silence imperils rebuilding of Quinn Group

In the run-up to the night of Thursday, March 13th last, someone cut the roof off a four-wheel drive jeep, loaded it with tires, petrol and small gas canisters, and reinforced its front by attaching an improvised battering ram to it. On the Thursday night, just after 9 pm, having driven to the Quinn Packaging plant in Co Cavan, the driver of what was now a large, mobile bomb, directed it at the double front doors and put the accelerator to the floor.

The plant produces food packaging such as dairy spread containers and the plastic trays chickens are sold on. Business is going well and production operates 24/7. On the night of March 13th, approximately 23 local workers were on duty when the jeep came smashing into the lobby, two men jumped out and set fire to their improvised explosive device. The men ran back out to the road where a third man was waiting in a getaway car. The bomb exploded causing massive damage to the plant. One can only imagine the shock and trauma suffered by the workers.

The getaway car sped off along the winding country road that links Derrylin, in Co Fermanagh, with Ballyconnell, in Co Cavan.The road, the R205, is a strange one in the commercial and industrial landscape of Ireland. The countryside is hilly, boggy in places, poor. The region to the north of the Border included some of the most dangerous areas for police and army personnel during the Troubles and, as one person spoken to this week said, was regarded a barren ground for security operatives in search of nationalists willing to provide information about the activities of the IRA.

Proposed purchase
At the corner at Derrylin where you turn to get onto the R205, someone has put up a large sign telling the Lagan Group to keep out, and asking when Seán Quinn will be back. Another similar sign stands alongside the road as you head towards the Border. It is worth pondering the insensitivity of these signs.

The Lagan Group was until recently considering buying part of the former Quinn Group. Last month, John Lagan, the chairman of the Lagan Group, received a letter warning that, if the sale went ahead, the buyers "would not live to see the benefits of the sale". The threat arrived on the same day that Lagan's wife died. The threat was just another low in a campaign against the Lagan Group, and the proposed purchase of the roof tile manufacturing business. No one has thought it proper to take down the signs.

As you drive from Derrylin along the R205, you soon find you are no longer on just another quiet border road, but are instead passing entrance after entrance to industrial plants and storage facilities. Glass. Radiators. Building materials. Large green-liveried trucks are everywhere to be seen.

From the top of a 100m pre-heating tower in one of two Quinn cement plants, you can see what Seán Quinn did with the small holding he inherited from his father, how the trucks are bringing quarried stone down from the rocky hills, and setting out to deliver finished products around Ireland and further afield. In a feat of extraordinary determination and vision, poor land was transformed into a wealth-producing conglomerate in a story that flies in the face of Ireland’s poor record for producing indigenous manufacturing industry.

After Quinn gambled and lost everything through his disastrous punt on Anglo Irish Bank shares, the industrial group was seized by a share receiver almost exactly three years ago. It had to confront the financial catastrophe caused by the Anglo gamble at the same time as Ireland, and then the rest of Europe, headed towards recession. Debtors other than Anglo – bondholders and funds based in the UK and the US – were owed €1.3 billion. Quinn’s industrial conglomerate, which had brought jobs and prosperity to a previously benighted region, was bust.

Yet, almost miraculously, the business hasn’t crashed. Approximately €800 million of the debt has been parked as part of a financial restructuring. One of the cement plants has been mothballed. (The Quinn plants have a capacity to produce 1.7 million tonnes of cement a year. Between 2007 and 2013, the Irish market for cement collapsed for 22 consecutive quarters, going from 6.5 million tonnes to just 1.7 million.)

Making a profit
In an effort to drum up new business, the new management has invested in a plant in Rochester, Kent, to receive Quinn cement by ship from the Ballyconnell plant, for sale into the UK's growing building sector. It is a part of a €30 million to €50 million planned capital injection over five years into the construction industry products end of what is now called the Aventas Group.

The numbers employed in the cement operation are up marginally on what they were at the time the group was facing collapse three years ago. It will produce 700,000 tonnes of cement in 2014.

Overall, the numbers employed in the Derrylin/Ballyconnell complex are now at 1,190, having been 1,161 three years ago. “The appointment of the share receiver saved the business, not the other way round,” says a member of the Aventas management.

Yet some people are doing their damnedest to frustrate, and even sabotage, what is by any measure an impressive accomplishment and one on which the entire region’s economy depends. The packaging plant, which employed 103 people three years ago and was struggling to pay for itself, is now making a profit and employing 141 people. Yet the criminals in the wheeled bomb risked their lives and the lives of others to try destroy it, seemingly to prevent its sale to new investors. They have never said what their objective is.

The attack is just one of almost 70 logged by the Quinn Group’s new owners since April 2011. There is outrage among the Aventas management at the continued attempts to sabotage their work and the economic lives of the people they employ, but no campaign of public outrage, or sense of mobilisation, about something that would presumably provoke a national emergency if it were happening in, say, Sandyford, or Leixlip, or if the plant involved was owned by Microsoft or Intel.

While the attacks are obviously not good for the business or in the interests of the employees whose livelihoods, and lives, they put at risk, they do not appear to be without logic.

The attacks have concentrated on the glass operation, the most profitable part of the various activities. Attacks on the electricity supply caused pumps to seize and molten glass to harden. It used to take just 30 seconds to rectify the effects of such attacks but in such a high-temperature operation that is a significant amount of time and there was a serious risk of an explosion. Management is convinced that those who carried out these attacks knew just what they were doing, not just in terms of how to carry out the attacks, but also how to damage value.

Management has had to spend money securing the operation against the campaign of sabotage. Two kilometres of three-metre high fencing has been installed, CCT cameras and related infrastructure, and other, expensive capital and manning security initiatives, have had to be funded in an effort to protect the group from the sinister entities that want to damage it.

The attacks have increased of late. It is believed this is a reaction to number of efforts to outsource or sell parts of the group. Although there is no obvious commercial reason for keeping, say, a packaging business in the same group as a cement one, some in the area are passionate about wanting to prevent the conglomerate being broke up.

Prospective buyers for parts of the group are said by the Aventas management to be people in the relevant sectors, or private equity investors, either of whom want to continue and grow the businesses, in search of a return. Such sales will secure jobs, not the opposite, they say.