The new 10p levy on plastic bags, to be introduced in the autumn, was a contributory factor in yesterday's closure of the 30-year-old Paclene plastics factory in Ennis with the loss of 53 jobs, its owner has said.
Mr Austin Brady, who took over the business in March from Irish Polythene Industries, said a potential Saudi investor in the business had decided to back off because the levy will put pressure on bag manufacturers to cut costs. Manufacturers were already facing cost pressure from Far East suppliers who were undercutting the market.
He said the levy was ill-considered because it would end up a money-spinner for the Government. Even if consumers turned to more durable plastic bags, these would end up polluting the environment and would still be there "when Moses comes round again".
Mr Brady has been involved in paper and plastics since he worked for Michael Smurfit in the 1960s, producing the old "glassine" bags for Tayto. He said Paclene had been making significant losses over the past two years. On a turnover of £6 million, it had lost £1.2 million. He had hoped to turn it around with added investment, but he had lost £400,000 in four months.
"The machinery is old. When you are in this industry, if you cannot change every three to four years, you are behind the times," he said.
The plant officially closes on August 7th, but with holidays taken into account, it closed for business at 4 p.m. yesterday amid worker dissatisfaction that, apart from statutory redundancy, they will receive £100,000 from their employer on a pro-rata basis. The closure comes at a time of concern about tourism in the region, and the erosion of the industrial base in Ennis following the closure of the Kel Electronics plant, with the loss of 70 jobs, in February. Although that plant was taken over by Molex Ireland, the Shannon-based electronics company, the closures are a concern, the vice-president of Ennis Chamber of Commerce said.
Mr Seamus O'Sullivan said Paclene was one of the first major industries in Ennis, and its closure was a sad occasion at a time when the unemployment register is so low.
He said the community should guard against being complacent about becoming a dormitory town. "While the number of people in employment in Ennis has increased, people employed in the town have decreased. More people are living in the town but they are going to Shannon and Limerick and Galway to work," Mr O'Sullivan said.