Tanaiste opens new Kostal Ireland facility in Mallow, Co. Cork.

Already employment has reached 130 people

Tánaiste Mary Harney today (Saturday 6th October 2001) performed the official opening of the new €50million(£39million) facility in Mallow, Co. Cork, for Kostal Ireland, a technology leader in a wide range of products for the worldwide automotive industry. The investment is supported by IDA Ireland.

"The combination of this facility with the long-established Abbeyfeale, Co. Limerick, facility makes Kostal's Irish operation a centre-of-excellence for electronics automotive products within Kostal's European operations. In addition, the introduction of a number of significant new technologies at both the Mallow and Abbeyfeale facilities and the company's move into industrial electronics as a further diversity, augers well for a bright future for both Irish facilities," said the Tánaiste.

"The combination of having two sites - in Mallow and Abbeyfeale - is a good move for Kostal and for the Government's and IDA Ireland's strategy for regional economic development in Ireland. It creates a geographical demand for skilled employment across a wider region, while maximising income for the region as a whole," she added.

"Having visited this location as a greenfield site in July of last year, to mark the commencement of construction of this fine new state-of-the-art facility, it is very encouraging to see how quickly this operation has ‘got up and running'. Completed in May of this year, it already employs 130 of the 850 people planned for recruitment by the end of 2005."

"In addition, Kostal's planned investment of €45million (£35million) for the consolidation and up-grading of technologies at the Abbeyfeale operation is also well underway and is a major endorsement of the successful and long established facility, which celebrates its 20 years in Ireland this year," said the Tánaiste. Kostal's establishment of the new facility in Mallow and its up-grading at Abbeyfeale was announced in October 1998 by the Tánaiste.

The Kostal Group, of Germany, is a family owned business and a technology leader in a wide range of products for the worldwide automotive industry. In partnership with its principal customers it is a leading automotive industry innovator, with a leading position in many of its products. Kostal employs over 9,000 people worldwide. Originally established in 1912 as a producer of insulating material, it entered the automotive market in 1927 and the industrial electrical market in 1995.

Kostal Ireland was established in Abbeyfeale, Co. Limerick, in 1981. Since start-up it has had consistent growth and expansion with the support of IDA Ireland and currently employs 1,065 at the facility. It is an integrated manufacturer of automotive electronic systems, such as window lift controllers and rain sensors. It is involved in a range of technologies including hybrid fabrication, sophisticated surface mount and automated board insertion, tool design and manufacture, plastic injection moulding and product assembly and test. Its principal end customers include Mercedes Benz, BMW, Volkswagen, General Motors, Ford, Volvo, Nissan and Toyota.

As an innovator in the industry Kostal invests well above the industry average in Research and Development. This enables the company to respond to change in demand for components in the rapidly evolving automotive markets. For example, as the demand for individual components and sub-assemblies declines Kostal can rapidly adjust to provide fully integrated modules to the car makers. Its partnership relationship with the major car manufacturers also gives it a technology, skill and expertise leadership position which is widely acknowledge in the industry.

The Tánaiste said that the arrival of Kostal to Mallow as the first significant overseas industry is proving to be a major boost to economic development of the town and the region as a whole.

She added that despite all the pressures on international businesses in the current climate, the Cork region's industrial base is holding up strongly, for the most part. "IDA, over the years, has managed to deliver a strong mix of world-class companies to the region in a range of sectors from pharmaceuticals, healthcare, electronics and most recently internationally traded services such as software, back office activity etc. While some sectors may experience volatility at times, the overall result of having this strategic mix of industries is better stability over the long term".

She also highlighted the significant contribution to the region's development made by the third level education sector - UCC and the Cork Institute of Technology. "The education resources of the region are one of the key factors influencing the growth".