The German owners of pet treat manufacturer Rondo Food will meet with staff at its Arklow plant today, amid growing fears for the future of up to 120 jobs there.
Management told employees on Friday that they are considering relocating the operations to its headquarters in Krefeld in Germany.
"As a result of negative financial results since the acquisition of the former Gaines Europe Ltd, a consultation process will now begin with the staff representatives," the company said in a statement.
"There is a possibility that the plant in Arklow will close in January 2020."
Gaines Europe Ltd had been manufacturing pet treats in the Co Wicklow town since 1995. It was bought by Rondo Food in 2011 and the firm later moved its operations to a larger factory on the south quay in 2013.
According to Rondo Food, its goal was to use the Arklow production facility to develop its business outside Europe. Rondo Food invested €6m in the new plant.
"Over the past few years, there have been considerable investments in modernisation, new technologies, logistics and in the employment of specialists," the company said.
"Despite these efforts, the necessary turnover has not been reached in order to achieve viable financial results for the company."
The company has paid tribute to the "immense dedication" of the 100 permanent and 20 seasonal staff working at the Arklow plant.
But it said that unfortunately, the financial results are not satisfactory. It is understood that Brexit, the weakening German economy and global economic challenges are among the factors that are making trading conditions difficult for the plant.
"We cannot jeopardise the entire Rondo Food Group and now have to consult with the Works Committee how the current situation in Arklow can be addressed ," explained Rondo Food Management.
It is understood that a 30-day consultation period with staff has begun. Workers are not represented by a union, but there is a workers' committee and assistance of the Workplace Relations Commission has been sought.
Voluntary redundancies are another possibility being considered.
Accounts for 2018 show that the Rondo Food Ireland made a loss after depreciation of €1,592,280, up from a loss of €759,312 the previous year.
In 2018, the turnover was €13,563,774.
The accounts also explain that during last year the firm reorganised its layout and setup of its production facility, reduced its work-in-progress and manual packaging and dealt with an unexpected reduction in sales from its biggest US customers due to a change of ownership.
Fianna Fáil TD for Wicklow, Pat Casey, said the potential closure must be avoided at all costs and called on the Government to pull out all the stops to keep the company from closing.
"If Rondo Food closes, the impact on the region will be devastating," he said.
"This many job losses in one town is huge and my thoughts are with the employees and their families who are rightly wondering what happens next.
Sinn Féin TD for Wicklow John Brady also expressed serious concerns about the future of the 120 jobs.
He has called on Enterprise Ireland and the Government to do everything in their power to save the roles.
"Such news would not only be devastating for the local economy, but most importantly for these workers and their families," he said.