Nestlé plant to close with loss of 57 jobs

MALLOW’S traditional industrial base was rocked yesterday as the food giant Nestlé announced it is to close its chocolate crumb production plant in the town with the loss of 57 jobs.

The decision will have a major knock-on impact on the local sugar factory, which is already facing an uncertain future as a result of proposed changes in European Union policy and pressure in world trade talks.

It will also have repercussions for Dairygold Co-op, going through a painful restructuring programme, which has resulted in more than 1,200 job losses, plant closures and the outsourcing of various parts of its overall business.

The chocolate crumb plant, previously part of the Rowntree Macintosh group, which merged with Nestlé in 1988, has been based at the Dairygold site in Mallow since 1947.

Each year it purchases some 80 million litres of milk from Dairygold, whose own milk processing plant in the same complex was seen as being at risk even before yesterday’s Nestlé announcement.

Dairygold, which employs another 60 people in the same complex, said it was extremely disappointed to receive confirmation of Nestlé’s decision.

It said it does not accept Nestlé is entitled to implement such a decision and has instructed its legal advisers to take immediate legal action against it for the enforcement of Nestlé’s agreements with Dairygold.

Irish Sugar, which employs 150 people in Mallow - it has risen to 241 for the beet processing campaign - supplies 20,000 tonnes of sugar to Nestlé to make chocolate crumb, an ingredient made from milk, sugar and cocoa that is used in chocolate manufacture.

Nestlé produces this ingredient at Girvan in Scotland, as well as at Mallow.

Nestlé Rowntree, UK and Ireland, managing director Chris White said there was no alternative but to close the Mallow plant.

A year-long strategic review of Nestlé’s business requirements for chocolate crumb identified that, due to improvements in production methods and the loss of the chocolate crumb contract for the Canadian market, these requirements could be met from one site going forward.

A detailed investigation established that by sourcing all crumb through the Girvan site, Nestlé can achieve lower total costs.

“Therefore, the plan is that the Scottish facility at Girvan will be retained while the Irish facility at Mallow will regrettably close. Subject to discussions, the closure is planned to take place by March 2005.”