SMURFIT KAPPA is eliminating as many as 140 jobs from its corrugated packaging plant in Togher, Cork, a move the company attributed to a sharp decline in demand for its product from Irish manufacturers.
Although the heavily indebted company said it will retain a “significant manufacturing presence” in Togher to service customers throughout the Munster region, only 30 staff will remain after the retrenchment process.
Smurfit Kappa’s profits are falling due to pressure on its global business, whose operations acutely sensitive to variations in economic conditions in its key markets. Shares in the company closed 5 cent weaker at €3.80 last night. Down more than 18 per cent in 12 months, the stock traded as low as €1.01 last October.
The company, indebted to the tune of €3.2 billion, has received support from its lenders to extend the terms of its debts, giving it greater financial headroom. The deal enables the company to extend the maturity date of a portion of its revolving credit facility and to raise longer-dated capital in bond markets to refinance some of its existing senior bank debt.
The job cuts in Cork will reduce to 710 from 850 the number of staff in its nine Irish plants. In addition to Cork, these are located in Dublin, Meath, Waterford and Galway.
A Smurfit Kappa spokesman declined to comment when asked last night whether there was any further threat to jobs in the company’s Irish operation. It is understood, however, that the business has no plans at present to eliminate further positions.
Staff were summoned in Togher to a meeting early yesterday to inform them of the job losses.
John Swain, who worked for 23 years at the plant, said workers faced an uncertain future. “Everyone was shocked by the news, despite the fact that we were all aware the volume of work had been reduced over the last year.”
Smurfit Kappa said the cuts will come into effect following the conclusion of a negotiations with workers and their representatives.
Cork Business Association chief Dónal Healy said the cuts added to the mood of uncertainty. “No-one seems to know where the bottom of the well is yet, not even the Government.”
