The continuing boom in construction activity last year saw Irish Industrial Explosives pay total dividends of almost € 13.8 million to its two major corporate shareholders, as profits rose by 7.5 per cent to more than € 17.7 million.

The company is 50 per cent owned by aggregates giant CRH, with the remainder held by Paris-based EPC Group, a major sectoral operator which owns explosive manufacturers throughout the world, in countries such as Australia, Senegal and Morocco.

Turnover at Meath-based Irish Industrial Explosives (IIE), which is the only explosives manufacturer in the country, climbed to € 46.6 million during 2006 from €42.5 million the previous year. The company retained profit of just €1.5 million in 2006, with the vast majority of profits being paid out as dividends. It has a total retained profit of €16.9 million.

The company employs 125 people, and last year paid wages totalling €7.1 million. Last year IIE sold explosives worth €11.4 million to CRH, while it purchased €800,000 worth of materials from EPC.

In accounts just filed for the firm, directors said that higher energy costs are having an impact on raw materials costs. Explosives are largely derived from oil and gas-based products.

A rapid slowdown in the housing market during 2007 is unlikely to filter through to IIE's revenues until next year, according to the company's plant manager, Pat Cosgrove. He added that full-year 2007 revenue will be "up slightly" on last year. Continued spending on infrastructural projects within the National Development Plan will continue to benefit IIE, he said.

IIE has been the subject of frequent criticism in the Dáil over recent years due to its dominance of the Irish explosives market.

In 2005, two Cork-based businessmen - Louis O'Regan and Colm Murphy - became involved in a new UK-based explosive firm established to challenge IIE's dominance of the Irish market. The firm had identified a suitable site in Wales, and intended spending €10 million on the project.

Mr Murphy said yesterday that the plans are now effectively "dead in the water", as the cost of flying explosives to Ireland was prohibitive. He had sought sites in Ireland, but a number of planning obstacles arose.