Hundreds of jobs at Greencore's sugar plants in Carlow and in Mallow, Co Cork, are under threat as the company considers major challenges facing the industry.
A decision to close the Carlow plant, which is considered the more vulnerable of the two, may be taken today by the board of the company's sugar division, Greencore Sugar.
A company spokesman declined to comment last night, beyond saying that it was evaluating how best to protect its business.
Sugar processors faced increased levels of competition as a result of impending EU reforms, he said.
The Irish Farmers Association said it would strongly resist any move to close either factory.
The Carlow plant, which has been operating since 1924 when it was the first sugar factory established by the State, currently employs nearly 200 permanent and 150 seasonal staff. Seasonal staff are hired for about three months towards the end of the year.
Just under 200 permanent and 130 seasonal employees work in the Mallow factory. It is understood the future of both plants is to be reviewed at today's board meeting.
Industry sources said the Mallow plant operated with more advanced technology and was therefore the more likely of the two to be retained.
The location of the Mallow factory outside the town is also more suitable for accommodating sugar beet deliveries.
However, there has been considerable investment in the Carlow plant in recent years, including the installation of two new beet-slicing machines.
Some €7.5 million was invested in the two factories last year.
SIPTU, which represents the majority of the workers in the two plants, has not been informed of any decision to close one or otherwise restructure operations.
Mr Mike Jennings, the union's south-east regional secretary, said it would not comment until the outcome of today's board meeting was known.
A decision to close either plant would have serious implications for beet farmers in the affected area.
In all there are 3,700 farmers growing sugar beet in the State which has to operate within a quota system similar to that imposed on milk producers.
Ireland is allowed to produce 199,000 tonnes of sugar and for that, 1.4 million tonnes of sugar beet has to be produced.
However, under pressure from the World Trade Organisation, the European Union has proposed major cuts in supports for Europe's sugar beet growers.
The EU reform proposals provide for a 25 per cent beet price cut in 2005 and 2006 and a 37 per cent cut in 2007, along with a quota reduction of 2.8 million tonnes or 16 per cent.
Of the national quota, 678,000 tonnes of beet is processed in the Carlow factory. It is transported there from farms in counties Carlow, Kilkenny, Kildare, Wicklow and north Wexford.
The farmer growers, who are among Ireland's richest and most progressive cereal farmers, receive about €35 million in payments from the Carlow factory.
Sugar beet grown in south Wexford and Waterford has traditionally been transported to Mallow, Co Cork, for processing there.
The chairman of the IFA's sugar beet section, Mr Jim O'Regan, said any pre-emptive move by Greencore to reduce its sugar-processing outlets ahead of the EU sugar reform would be strongly resisted by beet growers and the community at large.
"Both sugar factories are vital to the industry and the local economies of Carlow and Mallow," he said. "While reform of the EU sugar industry is imminent, it will be mid-2006 at the earliest before any reform measures are implemented."
The IFA was determined to resist the EU reforms and any move by the company to close either factory would be a vote of no confidence in the future of the industry.
"Greencore would be sending out the message that they would be caving into the EU reforms without a fight," Mr O'Regan added.