Manufacturing at the Jacob Fruitfield plant in Tallaght, Co Dublin, is end with the loss of 220 jobs, it was announced today.
In a statement, Michael Carey, chairman of the Jacob Fruitfield Food Group, said the biscuit manufacturing facility at Belgard Road is "extremely uncompetitive with outdated manufacturing equipment".
Mr Carey said the factory was built in the 1970s and operates at 16 per cent of full capacity. "It simply does not have the cost structure to compete, either when producing our own brands or undertaking contract manufacturing for export", Mr Carey said.
"Given the continued escalation of costs in recent years and the intensity of competition, we simply cannot continue to absorb the losses generated by this facility."
A €10 million fund has been committed by the firm for redundancy and retraining for employees affected by the decision. The company said redundancies will start from September 2008 and will be completed in 2009.
Jacob Fruitfield said the sales, marketing and administration part of the business will continue at Tallaght, while the manufacturing activities will be transferred to other sites in Ireland.
Once the restructuring is complete the Jacob Fruitfield Food Group will employ 120 people in manufacturing and at its head office.
Trade union Siptu said the job losses had come as a major shock to employees.
Assistant branch organiser Peadar Nolan, who represents 50 per cent of the workers, said: "The decision will mean over 200 workers losing their jobs on a phased basis from August 2008 to March 2009 and joining the growing dole queues.
"The prospects of alternative employment for so many workers is slim. "The community in Tallaght has never really recovered from the loss of 800 jobs when Packard Electric closed down in 2004," he said.
Mr Nolan said an urgent meeting has been sought with management over the possibility of retaining the manufacturing jobs in Ireland.
"The union will also be seeking a meeting with the Minister for Enterprise Trade and Employment, as soon as possible, where we will take the opportunity to express our concern in relation these job losses - especially since the employment potential of the food and drinks sector is specifically highlighted in Towards 2016," he added.
Labour Party TD for Dublin South West Pat Rabbitte said the decision was "serious blow to the local economy".
"This is the closure of one of the last manufacturing companies in the area that has a history of almost 100 years in Dublin."