Scandal surrounds Kepak closure in Drumshambo
MacManus calls on Mary Harney to act
BY ROISIN DE ROSA
Leitrim Foods, the Kepak operation at Drumshambo, County
Leitrim, closed down last June, and last week was inviting buyers in
for the machinery in the plant. A large and angry meeting last
week of townspeople last week called on Mary Harney to put a stop to
this asset stripping and make Kepak repay the £900,000 they have
received in grants.
The closure has brought the scandal of underdevelopment of the whole Leitrim area into sharp perspective. It also raises many unanswered questions - questions about what has happened to funds over the past ten years since the closure of the Arigna mines.
Leitrim Foods, a wholly owned subsidiary of the Kepak Group, bought the old Lairds jam plant from Greencore PLC five years ago. Kepak Meats, which is owned by the Keating family, is one of two major players, along with Goodman's Irish Food Processors, in the meat processing business. It is estimated to have 14% of beef, and 33% of sheep meat processing markets. Kepak's turnover of reckoned at over £500 million, employing some 900 people. The company is based at Clonee, Co. Meath.
Bought for a song
At the time of its sale to Kepak, the factory, on a ten and a half acre site, was valued, according to Councillor Gerry Dolan, at £1 million. Yet it was bought for the knockdown price of £175,000. ``There are many questions here to be answered, as to why the Kepak got the factory so cheap,'' says Seán Wynne, secretary of the Lough Allen Regional Community Association. ``It is a well known fact that the Keating family are close neighbours and friends of the Brutons, and the sale took place at a time when John Bruton was Taoiseach, his brother, Richard, was Minister of Industry and Commerce.''
Leaving a shell that nobody wants
A British company, Corporate Solutions Ltd., has been contracted to sell off the machinery. Robbie Grogan, Kepak's finance director, is quoted as saying that the plant would remain a fully serviced food factory, but when local people saw the catalogue of machinery for sale, it appeared that Kepak was selling not only the state of the art jam-making machinery and the pasta-making equipment brought in by Kepak, but refrigeration units as well.
Grogan said that these refrigeration units had been brought to the factory from other Kepak plants.
Sligo Sinn Féin Councillor Sean MacManus, at the meeting last week, described the sale as asset stripping. Local people have picketed the factory to ensure that Kepak does not succeed in stripping the factory to a shell, which no company would have an interest in buying. He points out that Mary Harney has a duty to intervene, so that these assets are used to create employment rather than facilitate Kepak to realise the value of assets which, by all accounts, they have not paid for.
``No capital grants''
Kepak claimed on 27 October that Leitrim Foods had invested considerable resources in the plant over the five-year period, ``without receiving any capital grants.'' But a spokesperson for Enterprise Ireland confirmed that in fact a total of £900,000 was given to Kepak in the form of employment grants, R&D grants and share equity, and that discussions were taking place with Kepak for the return of this money.
In response to this, Grogan of Kepak accepted that there was money owed to Enterprise Ireland. He said: ``We have a long-standing relationship with Enterprise Ireland and Forbairt before them. We have obligations to them and we intend to fulfil our obligations.''
Sean MacManus comments: ``Whatever Kepak considers to be its ``obligations'', it is the responsibility of Mary Harney at the Department of Enterprise to halt the asset stripping by Kepak and to ensure that these funds are paid back in full to Enterprise Ireland and used to benefit the community with proper full-time jobs.''
``More than 50 full-time jobs''
Kepak claims in its statement of 27 October that it had provided more than 50 full-time jobs, including several technical positions in the plant. However when it came to redundancies, there were only nine people entitled, through length of service, to any redundancy money. Accvording to workers, conditions in the factory were extremely poor. There was no union. There was a high turnover of staff. ``You were working in a refrigerator,'' says one young person who was employed there for a few months.
Kepak turns down buyer
Grogan adds that ``one of the primary remits given to the agents handling the sale of machinery is to try to find a buyer for the entire plant.'' He confirmed that a number of offers have been made. Yet Councillor Gerry Dolan says that an offer of £1.2 million has been made for the plant, vastly in excess of the original buying price, which Kepak has turned down. People are asking why.
``The whole thing stinks of unethical business practice,'' says Sean Wynne.
``The least that Minister Mary Harney can do is to come to Drumshambo and answer these questions to a community which suffered so much from economic deprivation,'' says Sean MacManus. To date, she and Agriculture and Food minister Joe Walsh have been passing the buck between them.''
Where has Arigna Fund gone?
But the biggest question of all raised by the closure and sale of the factory is what happened to the original Task Force Fund, which was set up following the closure of the Arigna mine in 1990. The ESB is on record of having contributed £6 million. Councillor Gerry Dolan estimates that the total funds came to £10 million. These funds were set aside specifically to deal with the loss of jobs and the economic decline of the region.
At last week's council meeting, Dolan asked the county manager, who along with council chairperson Tommy McCartin, was a members of the Task Force Enterprise Committee, to provide an account of how these monies had been spent. So far, this has not been done.
Drumshambo is dying
``Underlying this saga of broken promises, deception and lies, is the economic decimation of a community,'' says Sean MacManus. ``Drumshambo has suffered the loss of at least 450 jobs over the past 15 years, which would be the equivalent of some 3,000 jobs in a similar geographical area in Dublin.''
``The town is dying'', says Hugh James Gallagher, local Sinn Féin activist. ``Shops are closing down. Ten years ago there were 330 students in the Drumshambo National School - there are only 130 now. Each year the intake is falling.''
``Harney and her government colleagues in Fianna Fáil cannot allow the Drumshambo area to lose these jobs. Leitrim people have suffered too much over the years through lack of government commitment to the West,'' says Seán MacManus.
The day before Leitrim Food Products closed, Mary Harney visited the town. Her helicopter put down, not as intended in the Kepak plant, but on the local football pitch, which was locked. She was unable to get out. ``Did Mary Harney know all along that Kepak was to close and didn't want to have anything to do with it?'' asks Hugh James Gallagher.
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