Talks to open in effort to save 50 jobs at Athy plant

Negotiations will begin next month to save a tin can manufacturing plant in Athy, Co Kildare, which employs 50 people, after …

Negotiations will begin next month to save a tin can manufacturing plant in Athy, Co Kildare, which employs 50 people, after its majority owner, Borden Foods, was bought out by Nestle, the world's largest food company.

Borden Foods' milk powder packaging operation in Mallow, Co Cork, will close this summmer with the loss of 50 jobs after the multinational food and chemicals company - owned by the US buyout specialists, Kohlberg Kravis Roberts (KKR) - reached an agreement with Nestle to sell off its international "Klim" milk powder brand.

The future of the can manufacturing plant, Borden International, in Athy, which is 70 per cent owned by the group, is in doubt because it will lose half of its orders through the closure of the Mallow facility.

A spokesman for Borden said the company wanted to sell the can factory, which employs about 50 people, as a going concern. He said meetings would be held in February with the 30 per cent stakeholder, Crown Cork and Seal Inc, the world's leading packaging company for consumer goods.

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"The plan at the moment is that Crown would buy it," he said.

He added that, along with the 50 workers in the Mallow plant, up to 20 seasonal workers would also be affected by the closure. "The deal is not yet closed but it is due to close in the first quarter. The plan is then that there will be a supply agreement between Borden and Nestle for a period of four months.

"After that Nestle will absorb the production into their own facilities. That will basically mean that the plant in Mallow will be idle and will close," he said.

The regional secretary of SIPTU, Mr John McDonnell, has launched a campaign to keep open the facility, the only one of its kind in the country.

The repercussions will also be felt by the Dairygold co-operative, which, according to a Borden's spokesman, will have to find an alternative use for the milk powder, equivalent to 30 million gallons of milk, which was packaged in Mallow.

A spokesman for Dairygold was unavailable for comment but one industry source said the likelihood was that the co-op's milk powder could be exported in bulk to an alternative packaging facility.

The NestleBorden deal, worth over $400 million (£288 million), will mean that Nestle will also acquire Borden South Africa, a leading producer and marketer of non-dairy coffee creamer, and rights to "Cremora", a non-dairy creamer brand in Africa and the Middle East. A Puerto Rican ice-cream manufacturer, Mantecados Nevada, will also change hands.

According to a statement from Borden's world headquarters in Columbus, Ohio, the company is concentrating on its core "grain-based meal solutions", which include pasta, dried soup and bouillon.

Borden Inc was taken over by KKR in 1994 in a $2 billion deal. KKR is famous for being involved in the largest corporate takeover ever, the $25 billion buyout of RJR Nabisco in the eighties.