Dáil Éireann - Volume 394 - 06 December, 1989
Adjournment Debate. - Tanning Industry.
An Ceann Comhairle Seán Treacy
 An Ceann Comhairle: Deputy Deasy gave me notice of his intention to raise on the Adjournment the plight of the tanning industry in Ireland. The Deputy has ten minutes to present his case and the Minister has five minutes in which to reply.
Mr. Deasy Mr. Deasy
Mr. Deasy: Ten years ago over 1,200 people were employed in the tanning industry. Today the number is barely 100, despite a huge increase in cattle slaughtering resulting from the phasing out of live exports. In addition, the quality of hides nowadays is far superior because of advanced skinning techniques and the virtual elimination of the warble fly. The Government proposed to create jobs using native raw material wherever possible, but the reality is very much the reverse where tannery jobs are concerned. The traditional tannery towns of Carrick-on-Suir and Portlaw have been devastated by unemployment. I challenge any Member of this House to tell me that there is a town in their constituency which has a higher rate of unemployment than either Carrick-on-Suir or Portlaw. I could virtually say that Portlaw is a ghost town because of the collapse of the tanning industry there, which was better known as Irish Leathers. Carrick-on-Suir is not much better.
In my own town of Dungarvan there was an announcement this week that the 55 jobs in the local tannery are going to be reduced by 15. Even at that it is still the largest tanning enterprises in the country. I am aware that there is also some tanning of leather going on in Clonmel by the Ronan family, but it is all very minor in comparison with what we had. The extent of the treatment of hides is not what it should be. I am not criticising those doing it, but there is enormous scope for further value added in this sphere. Instead of having 100 jobs we  could have several thousand jobs if we processed the raw material to its ultimate value. If the full value added product, that is finished leather and leather goods, such as shoes and clothes, were manufactured in Ireland we could have thousands of extra jobs.
The related meat industry has gone ahead in leaps and bounds while the processing of the by-product — the hide — has virtually stopped. The vast majority of hides are exported and we then buy them back as the finished product at a multiple of the original cost. We may get a measly few million pounds for the hides we export, but more than likely we buy back leather clothes, shoes and handbags for hundreds of millions of pounds. These products are manufactured in countries such as Germany and Italy and fetch premium prices. It is absolutely incomprehensible and extraordinary that we cannot have a tanning industry which will bring the raw material to the final stage for manufacturing purposes and that manufacturing itself is not carried out in this country. As I said, seeing that the meat industry, a related industry, has advanced so far, it is hard to believe that the tanning industry has gone backwards.
We are long overdue a new tannery to provide badly needed jobs to complement advance processing in the beef industry. It will have to be a green field operation; there is no doubt about this. The fact is that tanning is very harmful to the environment. There is a very high environmental risk involved, and I can foresee problems setting up a new tanning industry. It has caused problems and with a growing awareness of the value of a clean environment it is going to be extraordinarily difficult to set up a tanning industry which will satisfy the environmentalists, but it has to be done. It should have been done years ago. As I say, it is ten years since the industry first got into serious trouble. I am not criticising anybody because previous Governments as well as this one have had to face the same problems in attaching foreign  investment and I am aware that the IDA have been trying hard, although I sometimes wonder if they have been trying hard enough.
From time to time we have heard that German or Italian industrialists are coming to this country to set up a tanning industry. More recently there have been stories that an Australian concern is coming to Ireland to set up such an industry. I hope this latest story is true because people in Dungarvan, Carrick-on-Suir and Portlaw no longer believe politicians when they say an industry is coming. I would like the Minister this evening to give some assurance that there is a definite proposal on the table. It is extremely badly needed and we would be very gratified if he could give us such an assurance.
I ask you, a Cheann Comhairle, to allow the remainder of my time to be divided between Deputy Davern and Deputy Ferris who have asked me to allow them speak on this subject.
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: Is that satisfactory? Agreed.
Mr. Ferris Mr. Ferris
Mr. Ferris: I thank Deputy Deasy for sharing some of his precious time with Deputy Davern and me to enable us to speak on what is a very important subject for all of us in the constituencies of Waterford and South Tipperary. Deputy Deasy has referred to his worries about Portlaw. All of us in this House, including yourself, a Cheann Comhairle, share the concerns of the people living in Carrick-on-Suir, who feel really hard done by because of the closure of the major tannery industries there, Plunder and Pollock and Irish Leathers. The co-operative movement in the town, comprising the employees of the companies I have referred to, tried to raise funds through the trade union movement, industrialists, shopkeepers, chambers of commerce and others put together a package which was approved by the Government and the IDA following a feasibility study. Indeed,  a predecessor of the Minister, Deputy Smith, announced the sanction of 25 jobs with the co-operative movement in Carrick-on-Suir. However, nothing happened despite tremendous publicity.
As Deputy Deasy said, many people are unhappy with our efforts because they have not come to fruition. As Deputy Deasy also said, there was an announcement recently that an Australian enterprise would be coming to this country, but I would like to see a full bovine tanning industry in Carrick-on-Suir where there is a tragically high level of unemployment. I feel the National Development Corporation, the IDA, the Government and the co-operative movement would be prepared to fully support such an industry which was native to Carrick-on-Suir and which provided tremendous employment. There is a market for that product, a by-product of the bovine industry.
Mr. Davern Mr. Davern
Mr. Davern: I thank Deputy Deasy for sharing his time with me. I think he got to the kernel of this issue, the environmental aspect. The time to strike is when the iron is hot. Last week people from Australia came here to take a look at the tanning industry. It is vital that the IDA act on this, but the longer they take the harder it will be to attract a tanning industry to this area. An old saying in Carrick was that there was no smell off the money, that there was good money out of it. The smell, unfortunately, may be a problem in the future and there will be a major problem in relation to river pollution as well. Now is the time to get working while people appreciate that there is need for the jobs and can remember what the old institute was like, and how tolerant of it people were because of the jobs that had been created. Any modern industry however, would have to take much more care in regard to air pollution.
It is disgraceful that while we are exporting so much meat, we are not using the added value of the hide. I urge the  Minister to give an assurance that the IDA are doing everything possible to have the industry placed in Carrick-on-Suir where there are skills and the knowledge needed for it. The factory would also serve Deputy Deasy's constituency down there.
Mr. Kenneally Mr. Kenneally
Mr. Kenneally: I would like to be associated with the remarks of the three previous speakers.
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: I want to facilitate the Deputy, but the time has come to call the Minister. I am sure we shall facilitate the Deputy for some few minutes. Is the Minister conceding time to the Deputy?
Minister of State at the Department of Industry and Commerce (Mr. Smith) Minister of State at the Department of Industry and Commerce (Mr. Smith)
Minister of State at the Department of Industry and Commerce (Mr. Smith): Yes.
Mr. Kenneally Mr. Kenneally
Mr. Kenneally: I support the remarks of the three previous speakers particularly about the devastation in the tanning industry as it relates to my own constituency and the towns of Dungarvan and Portlaw. In Portlaw it came home very strongly to me during the recent general election that the town is almost a ghost town. I urge both the Government and the Minister to do all in their power to rectify the situation.
Mr. Smith Mr. Smith
Mr. Smith: Up to the mid-seventies there was a strong leather industry in Ireland. It centred around the activities of the Irish Leather Group which had plants processing bovine and sheep hides into leather in locations such as Portlaw, Gorey, Carrick-on-Suir, Dungarvan and Carlow. At peak it employed 1,200 persons and in 1977 had a turnover of £25 million. The mainstay of its market was the supply of shoe leather primarily to local but also to UK manufacturers. Since then, in common with major portions of the tanning industry in developed countries it fell into serious decline and the Irish Leather Group closed in 1985.
 The past 15 years have seen the rapid growth of the East Asian and South American leather industry and the rapid contraction of the industry in Northern Europe and North America. The significant rise in cheap footwear from developing countries to Northern Europe and North America has eroded the market since of the local footwear manufacturers in these markets. This in turn has impacted on the tanneries in the developed countries forcing many to close.
Those declining shoe producers have resorted increasingly to imported, cheaper leathers and footwear components in order to hold down their costs. The overall result has been a great increase in international trade in raw hides, leather and leather footwear and the severing of the traditional link between a tanner and his local footwear producers.
It has long been recognised that Ireland has strengths in the area of hide quality and availability which could potentially form the basis of a competitive integrated leather industry. The hides are large, healthy, warble free and are available in high volume in a small geographic area where hide ownership is concentrated. Irish hides are in the main suitable for high quality uses, for example, upholstery. Industry experts who have recently examined the sector predict a worldwide growth of demand for all main types of leather up to the year 2000. The biggest increase in demand is predicted to occur in the upholstery area where the average growth rate is put at approximately 16 per cent per annum.
It would appear therefore that the opportunity for Ireland lies in the high growth upholstery and miscellaneous sectors for which the quality and characteristics of Irish hides are particularly suitable.
Given the high percentage of hides being exported unprocessed from this country the IDA have extensively investigated the international bovine leather  industry to determine the feasibility of developing integrated leather processing in Ireland. This work involved visits to a cross section of leading tanneries, as well as industry associations and equipment suppliers in the UK, Germany and Italy. Market investigations were undertaken in conjunction with CTT into certain European and Japanese niche markets.
The IDA have concluded from these investigations that Ireland can support immediately two modern integrated tanneries. The Authority have been actively promoting the development of new tanning projects for some time and are currently engaged in discussions with a number of promoters towards this end. I am happy to be able to say that firm proposals for the establishment of an integrated bovine tannery are expected from two of these promoters. The Deputy will appreciate that I am not in a position to give any further details concerning these discussions at this stage.
While Ireland has undoubted strengths as regards quality of hide availability, access to and expertise in the latest leather processing technology and in marketing will be crucial to the success of any new venture that emerges. While I would be hopeful that a project will emerge from the discussions just referred to I would point out that the IDA have already approved grant assistance to Carrick-on-Suir Co-operative for the development of a finished leather processing project which could lead to the creation of 25 new jobs. This project has not yet got off the ground.
What I have had to say so far relates mainly to the bovine leather industry. However I would like to point out that the development of processing in the ovine leather sector is also being actively promoted. Indeed, I am happy to say that the IDA are at present finalising discussions on a project for the finished processing of sheep skins. This project could lead to the creation of 40 new jobs at full production. The Deputy will appreciate  in this case also that I am unable to give any further details.
Overall, I want to assure the Deputies and the House that everything possible is being done to increase substantially on the level of hide and skin processing activity. In view of the very competitive and ever-changing nature of the finished leather market-place, it is vital that we secure promoters with the necessary production-technical and marketing expertise and a fair bit of financial clout behind them.
Dáil Éireann 394 Adjournment Debate. Tanning Industry.