Dairygold to fight Nestle plant closure

Dairygold is to seek a High Court injunction to prevent UK chocolate manufacturer Nestle from closing its chocolate crumb factory in Mallow next March with the loss of 57 jobs.

It follows Nestle's announcement yesterday that it is to close the chocolate crumb factory, which is based at the Dairygold plant in Mallow, on foot of a 12- month strategic review of its business operations in Ireland and the UK. The announcement came just a day after Dairygold announced it is to transfer 120 administrative jobs from Mallow and Mitchelstown to Cork city.

According to Nestle Roundtree UK and Ireland managing director, Mr Chris White, the review was triggered by the company's loss of a 10,000-tonnes-per-year chocolate crumb contract for Canada due to increases in Canadian import duties.

Nestle - which buys some 80 million litres of milk from Dairygold and 20,000 tonnes of sugar from Irish Sugar per annum to make 35,000 tonnes of chocolate crumb in Mallow - is to centralise its chocolate crumb manufacturing operations in Girvan, Scotland.

Mr White said that the review had examined all possible options but Girvan was a more cost-effective base for its operations, with transport costs from Mallow to its manufacturing plant in York and conversion costs being among the factors considered.

The Mallow chocolate crumb plant - which has been in operation since Roundtree established it in the late 1940s - will close next March, subject to discussions. Nestle said efforts would be made to help employees find alternative opportunities.

However, a Dairygold spokesman said the company was disappointed at Nestle's decision and it did not accept that Nestle was entitled to close the Mallow plant.

"The co-op has instructed its legal advisers to take immediate legal action against Nestle for the enforcement of Nestle's agreements with Dairygold," said a Dairygold spokesman, adding the co-op would make no further public statement on the matter pending the outcome of High Court injunction proceedings.

Meanwhile Cork East Labour TD Mr Joe Sherlock called on the Minister for Enterprise, Trade and Employment, Mr Martin, to intervene. The announcement was "another blow in a series of job losses in the east and north Cork region". Mr Sherlock warned that the closure of the plant would seriously weaken the sugar industry in Mallow and could lead to further job losses in the area.

SIPTU's Mr John Cooney said the decision was an unexpected and devastating blow for the workers and it made it even more important to save the 120 Dairygold administrative jobs that are being transferred from Mallow and Mitchelstown to Cork city.

Local Fine Gael Senator Mr Paul Bradford said the Government urgently needed to bring new industry to Mallow and north Cork, particularly given that the Nestle announcement followed Dairygold's plan to transfer jobs from north Cork to Cork city.