Biscuit jobs can cease as well as be created

The welcome given to plans by former Jacob Fruitfield management to set up a biscuit factory in Drogheda creating 100 jobs has to be tempered by the knowledge that many of the same individuals were involved in the shutting down of a biscuit factory in Dublin's Tallaght in 2008 with the loss of 220 jobs.

Jacob Fruitfield closed its Belgard Road facility that year and transferred the manufacture of Kimberley, Mikado and Coconut Creams to the UK and Portugal.

"It simply does not have the cost structure to compete, either when producing our own brands or undertaking contract manufacturing for export," explained the then chief executive and largest shareholder Michael Carey.

Fast forward seven years – including the sale of Jacob Fruitfield to Valeo Foods for €70 million – and Mr Carey's fronting of the East Coast Bakehouse. It is a football-field-sized factory that will "provide a new commercially competitive local Irish source of biscuits" and avail of a "great opportunity to provide high-quality biscuits to UK retailers", he explains.

It would follow that the new venture has a very different cost structure from the old Tallaght plant. Several factors are at play no doubt. The new facility will be investing in modern machinery while parts of the old factory dated back to 1970.

Factor of labour

Labour

costs are presumably also more competitive now. Jacob Fruitfield employed 220 unionised workers with years of service who were let go at a cost of €10 million. Many were of an age where they doubted their chances of finding another job. These individuals did not know it at the time, but they were casualties of capitalism’s penchant for creative destruction. The 100 people who will get jobs in

Dundalk

are the beneficiaries.