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Cappoquin Chickens to Close - Reactions

by 5m Editor
17 September 2008, at 11:54a.m.

IRELAND - Cappoquin Chickens in Country Waterford is to be closed following the failure of a rescue package.

The Irish Times reported on 16 September that Cappoquin Chickens in Country Waterford is to be wound up after efforts to put together a rescue package to save the company failed.

John O'Connor, whose grandfather founded the business in the 1930s, told the newspaper that he "deeply regretted" the action but that their resources had been exhausted. The plant will be closed within six weeks.

Representatives of some 200 workers were formally told the news at a meeting with the receiver later that day

Previously, the High Court heard that Michael D. O'Connor Sons and Company, which trades as Cappoquin Chickens, showed a deficit of €806,000 on an ongoing basis and had a winding up basic deficit totalling €7 million.

Mr O'Connor said earlier this month that Cappoquin, like the rest of the Irish poultry industry, had suffered as a result of the bird flu scare and rising prices for chicken feed, as well as from cheaper foreign imports.

The company contributes €6 million to €7 million annually in wages in the locality and a further €1.5 million in payments to chicken producers.

Labour party TD Brian O'Shea said the news would come as "a devastating blow to the workers at the plant, local growers and the entire community in West Waterford."

"When the news broke earlier this month that Cappoquin was to be liquidated, we hoped against hope that closure would not come to pass. Sadly those hopes have now been dashed," he said.

"I am calling on Enterprise Minister Mary Coughlan, Agriculture Minister Brendan Smith, and Minister for Food, Trevor Sargent, to pull out all the stops to make sure that everything possible is retrieved from this situation."

'Devastating Blow'

On 17 September, The Irish Times reported further reactions to the closure of Cappoquin Chickens. The news to close with the loss of 200 jobs and more than €20 million annually to the local economy in west Waterford has been greeted with dismay by workers and poultry growers. It has been described as a "devastating blow" for the area.

Liquidator Aidan O'Connell of Deloitte confirmed yesterday that discussions with a third party to try and save the plant had ceased and with no further prospect of finding a buyer, he would move to wind down the company's operations.

Mr O'Connell met representatives of the Services, Industrial, Professional and Technical Union (Siptu) to brief them on the collapse of a rescue deal involving British firm Derby Poultry and the O'Connor family, which has owned Cappoquin Chickens since its establishment in the 1930s.

Siptu Waterford branch secretary Davy Lane told the newspaper that while workers were aware of the precarious position the company was in since going into examinership in the summer, they had still remained optimistic that an investor could be found.

"It came as a shock to most people, because everyone was hoping that with all the negotiations taking place, somebody would come in and buy the plant.

"It's a devastating blow, not just for Cappoquin but for all of west Waterford; it's the biggest employer in the area."

Mr Lane said he expected the wind-down to take between four and six weeks and stressed that workers would get their statutory redundancy. Mr O'Connell had applied to the State's solvency funds for funding to pay redundancy when he was appointed as examiner.

Ned Morrissey, chairman of the poultry growers committee of the Irish Farmers' Association (IFA) and a supplier to the plant, said more than 40 suppliers were similarly dismayed as they continued to hope that some deal could be reached.

"It's a sad old day for Cappoquin and the 40 or so growers who supply the plant are just gutted - we're much too far away from the other processors to start supplying them, so it looks like we're going to have to get out of poultry completely," he said.

Mr Morrissey said many of the poultry suppliers had invested heavily in recent years in chicken houses which were now redundant, while they were each on average owed about €50,000 for stock by Cappoquin Chickens.

"What's killing the Irish poultry industry - and Cappoquin isn't the end of it - is the fact that the Government sat on its hands and nodded its disapproval but did nothing. An investor would have had more confidence if they had done something about the labelling of imports."

John O'Connor of Cappoquin Chickens echoed Mr Morrissey's concerns about the future of the poultry industry in the face of twin threats from cheap imports and the rising price of chicken feed, which added €3-4 million to the company's costs last year.

Mr O'Connor said that Cappoquin had losses of €8.5 million, exclusive of loans to the family of about €3 million, and where the company has been struggling to break even in recent years, this rise in feed prices was devastating.

"From an O'Connor family point of view, we're deeply disappointed. We wish there was some way that we could save the jobs but we just didn't see a viable future. We committed so much financially to the business over the years that our resources have been exhausted."

Local Labour TD Brian O'Shea called on the Government to ensure Fás [Ireland's Training and Employment Authority] provided training to upskill employees. Opposition party, Fine Gael, spokesman on agriculture Michael Creed said the closure reflected the Government's failure to address underlying problems in the poultry sector, such as spiralling feed costs, loopholes in labelling legislation and cheap imports.

Further Reading

- Go to our previous news item on this story by clicking here.