Ardagh may open different business

 

Ardagh will consider locating a different business in the glass bottle plant it is closing in Ringsend, Dublin, its chief executive said yesterday. At present, Ardagh is solely a glass bottle manufacturer. A decision to become involved in a new sector would not require shareholder approval unless a significant capital investment was required, and that is considered unlikely.

Trade union representatives will today begin negotiations with management at the plant, which is to close over the coming eight to 10 weeks. The 24-acre site on which the plant is located is leased from Dublin Port Company, with 64 years still to run on the lease. Mr Ken McDonald, of Hooke & McDonald, estimates the lease could be worth in the region of €20 million, depending on the restrictions it contains.

Dublin Port leases usually restrict use of a site to a dock-related activity and allow the authority to withhold consent if it believes a site is being put to a use which does not fall within parameters contained in the lease. The Ringsend site would not be available for development.

Mr Eddie Kilty, Ardagh chief executive, said the site was "certainly not going on the market".

He said the company had been concentrating in recent times on trying to save the plant. Now that had failed, it would begin the process of looking for an alternative business for the site. One option is warehousing. Bottle manufacturing has fixed production but cyclical sales, with 40 per cent of sales occurring in the eight weeks before Christmas. For this reason, warehousing was an important element in the Ringsend operation.

Mr Kilty said other possible manufacturing operations would be looked at over the coming months. He did not want to say what they might be. He said he was 30 years with Irish Glass and it was "very disappointing that it has come to this".

Closure was "like losing a brother or a sister".

Mr Gerald Lynch, SIPTU branch secretary, said the value of the lease at Ringsend would be one of the points the union would raise in its discussions with management on the issue of severance pay. "We will be making the point that the resources are there to provide for proper severance terms for the employees."

Mr Lynch said the company's 370 employees were losing their jobs because Irish customers of Irish Glass had decided to source their bottles abroad, because they could get them cheaper there.

The company has said customers were willing to pay the higher price being sought by the company but the volumes were down 30 per cent on previous agreements. This made the plant non-viable, the company said.

While its three British plants are currently working to full capacity, Ardagh may tender for Irish business and, if it is more profitable than business already being catered for at the British plants, use it to replace those current orders.

Repak, the industry-funded waste packaging compliance scheme, said the closure of the Ardagh plant was "a disaster for the recycling of glass in Ireland". The closure of the plant "will have dramatic ramifications for Ireland", said Mr Andrew Hetherington, chief executive of Repak.

It would take away the Republic's ability to find sustainable economic markets for recycled glass packaging at a time when all EU waste packaging targets were increasing, he said.

"The closure of Irish Glass will result in Irish industry paying additional costs for the shipment of glass to the UK market for recycling," he said. He called on politicians to set up a task force to look at a system for recycling glass in the Republic.

The Tánaiste, Ms Harney, said the news that the Ardagh plant was to close was a severe blow to all concerned. She said all that could be done would be done to secure alternative employment for the Ringsend area.

Most of the workers, along with about 50 retired workers, own an 11-acre sports club in Goatstown. The grounds, if sold for development, could be worth in excess of €20 million or €60,000 per member.

In March, when Ardagh first announced it might be going to close the Ringsend plant, some members said closure of the sports club should be considered. However, other members are understood to be against such a move.