US gas equipment group Harris Calorific reported a 47 per cent rise in pretax profits at its Irish unit in Co Wicklow in the weeks before it decided to close the plant and make more than 70 workers redundant.
The company, which has been discussing severance terms with staff at the Rathnew plant since last month, is moving the entire operation to Poland because wage costs there are much lower than in Ireland. The closure is being planned in spite of higher sales and profits at the plant, which makes gas cutting and welding equipment.
Accounts filed just before Christmas show that pretax profits in the Irish operation grew to €2.62 million in 2004 from €1.78 million a year earlier.
With turnover on the increase to €9.07 million in 2004 from €7.37 million, the rise in profits followed a 25 per cent increase in the previous period.
The accounts, signed off on October 28th, said there had been no significant events since the end of the financial year. Staff were told less than six weeks later that the plant would close at the end of 2005.
A spokesman said the closure had nothing to do with the performance of the workforce in Rathnew and was due only to lower wage rates in Poland. "Labour costs there are one-sixth of what they are here," he said.
The company is known to have acquired a 10,000 sq ft factory in Poland. Workers there will earn $3 (€2.50) per hour, compared with $18 (€15) per hour in Co Wicklow.
The latest accounts indicate that Harris Calorific paid out no dividends in 2004 to its parent, the Lincoln Electric Company. The company had debtors of €6.83 million and cash of €4.57 million at the end of 2004. While information about its performance in 2005 is not yet available, the firm started the year with retained profits of €10.88 million.
The accounts show that the company's 79 staff in 2004 were paid a total of €2.47 million. This was up from €2.11 million in 2003, a year in which it had 82 staff.
Harris Calorific incurred an exceptional redundancy cost of €58,831 in 2004 related to a restructuring programme then in operation. No provision was made for restructuring costs going forward.
The decision to close the plant was made public shortly before an Arklow credit card processing firm, EuroConex, put its 300 staff on notice that a round of job cuts was likely in the new year.
