Greencore has announced that it is to consolidate all of its sugar manufacturing at its Mallow site and will close its Carlow manufacturing facility in mid March.
The company also announced that a redundancy programme would be implemented at the Mallow facility and the business there streamlined.
Greencore said the decision to close the Carlow plant had been taken after a strategic review of Irish Sugar in anticipation of pending reform of the EU sugar regime and the increasingly competitive nature of its markets.
In total, 189 full time and 137 seasonal employees will become redundant, with Irish Sugar's total workforce falling from 614 to 288. 35 of the full time jobs and 16 of the part-time jobs affected will arise through a voluntary redundancy programme already agreed for the Mallow facility.
63 staff jobs will be retained in Carlow in sales, marketing, distribution, sugar packaging and administration.
The company said that work would now begin on upgrading and increasing the capacity of the Co Cork plant - this will be completed in time for this year's processing campaign.
Greencore said the net cash outlay from this consolidation will be between €20-25m and will be mainly be made up of the capital investment at Mallow, redundancy costs and site decommissioning costs.
The company added that the move will reduce Irish Sugar's annual cost base by some €6-7m by the 2007 campaign, before taking account of the costs of financing the consolidation. 'This will, however, only partially offset the anticipated profit reduction that will arise from the EU sugar regime reform,' Greencore added.
The move will give rise to an exceptional loss of €65m, to be provided for in the 2005 accounts.
'There is a long and proud tradition of sugar production in Carlow, commented Greencore Chief Executive David Dilger. 'This decision, therefore, has been particularly difficult and painful, but nonetheless, unavoidable,' he added.
'European sugar processors are facing increased levels of competition and impending regime reform. We have conducted a comprehensive review of all options available to the business in this challenging environment,' Mr Dilger said in the statement.
'It has confirmed that consolidating manufacturing in Mallow is a necessary step to secure the survival of the Irish beet growing and sugar processing industries for the benefit of all involved,' he added.
* Greencore shares closed down eight cent at €3.06 in Dublin.
