Competition from low-cost operators in Asia has forced the closure of the ribbon manufacturing company, CM Offray & Son, based in Roscrea, north Tipperary, with the loss of 140 jobs.
The company has been experiencing financial difficulties for some years and an attempt by IDA Ireland to find a strategic partner in Europe over the last six months has failed. The company will finally close at the end of May.
The company has been operating in the town since 1979 and is one of its largest employers. The Minister for Defence, Mr Smith, said last night that the Government was currently "preparing the ground" for an alternative local industry.
The State training agency, FAS, would immediately assess the workforce and prepare them for re-training, said Mr Smith. The plant is in Mr Smith's constituency.
The company said the reason for the closure - apart from competition from the Far East - was "high transport costs and long turnover times". Plant manager, Mr Kevin Graham said the firm had had to export 95 per cent of its products to the EU and the additional burdens were significant.
"Without a significant domestic market for its product, the company does not benefit from the economies of scale of its EU competitors," he said.
"Having sustained substantial losses for the last four years, the company has reluctantly concluded that that is no longer sustainable," he stated. According to sources last night, the company lost £2.6 million (€3.3 million) over the last three years.
The workforce at the plant is mainly female and their trade union, MSF, is expected to meet management shortly to agree a redundancy package. The company is a wholly-owned subsidiary of CM Offray & Son Inc, based in New Jersey.
It was reported in January that the jobs at the plant were at risk, but the company said there were still "a number of options" available.
IDA Ireland's regional manager, Mr Brendan O'Sullivan, led the search for a European partner, but it is understood there was little interest shown in the proposal.
Mr Smith said he was aware of the difficulties at the plant, but was shocked to hear it would close. "I will be arranging to meet representatives from the company with a view to ensuring that the best deal possible is provided for a loyal workforce," he said.
Senator Kathleen O'Meara (Labour), who ran in the general election in North Tipperary, said "urgent action" was required to find replacement industries, and this should include the establishment of a task force. "Jobs' task forces have achieved success in other areas of the country and Roscrea deserves this type of Government support at this critical time," Senator O'Meara said.
Mr John Lupton, of the Roscrea Chamber of Commerce, also called for a task force to be set up.
