Wrights buys Red Sail plant
Wrights of Howth has bought the former Red Sail prawn and scallop processing plant at Kilmore Quay in Wexford. Wrights will invest €6 million, including the purchase price, in the plant but it did not provide a breakdown of the purchase price.
The Kilmore Quay operation was closed last January along with two other Red Sail plants in Louth and Galway with the loss of almost 270 jobs following the appointment of a receiver. The receiver was appointed by Ulster Bank, which was understood to be owed about €7.62 million by the group.
Wrights of Howth currently employs 86 people at its export and Irish distribution centre in Dublin and at its retail outlet in Dublin Airport.
The Kilmore Quay plant will open next Monday, July 1st, with around 35 staff re-employed to carry out processing of prawns and scallops.
By the end of the first year's trading, the company hopes this will have risen to 60 with a further 10 employees expected to be hired in the following year, Wrights said.
Projected output for the facility is 1,000 tonnes of prawns and 300 tonnes of scallops in the first year of trading. Wrights expects to export 1,000 tonnes in its first year of business at Kilmore Quay, representing a 14 per cent share of the Irish export market of 7,000 tonnes of prawns annually. It said it expects to raise its share of the market to 20 per cent by the second year of trading.
Wrights is also interested in taking over the remaining Red Sail operations.
"I have an offer in on all three and this is the first one that has come on the market. We are in negotiations on the other two," said Mr Mark Wright, managing director of Wrights.
But he declined to reveal any further details on the negotiations, although it is understood that a decision on the two plants could be made by September.
Red Sail was formed in 1976 and produced a range of fish products for the home and export markets through its three companies, Red Sail Frozen Foods Ltd, Red Sail Kilmore Ltd and Red Sail Exports Ltd.
It employed 160 at its headquarters in Clogherhead, Co Louth, nearly 100 at Kilmore Quay and about 15 at its facility in Galway.
The decision by Ulster Bank to appoint a receiver last January came as a surprise to staff and suppliers, who had received no indication of Red Sail's financial difficulties.
At the time, Mr Derek Younger, the managing director of Red Sail, threatened to sue Ulster Bank for €25 million following its decision to appoint a receiver.
Mr Younger said he could have covered the €7.5 million owed to the bank through stock and debtors. He said the company had made losses in the past number of years due to the bank's interference in his management of the company. He also said the bank had pressured him into selling prawns six weeks ahead of the normal selling season and at a disadvantageous price, which had a knock-on effect on the company's finances.
At the time, a spokeswoman for Ulster Bank said it did not comment on individual customer accounts.