Food group Dairygold is in talks with the Welsh Development Authority that could lead to it repaying approximately €1 million in grant aid it received for a plant it closed in Wales last month.
The Cork-based group closed its loss-making cheese-packing facility in Felinfach, Wales in mid-February.
The Welsh Assembly had paid £660,000 (€1 million) to the company to help cover the cost of cheese-packing machinery installed in the plant.
Following the closure, Dairygold sold this machinery to the Irish Dairy Board's (IDB) Kerrygold cheese-packing plant in Leek, Staffordshire, England. Dairygold has a 20 per cent stake in the IDB.
The Welsh Assembly has now confirmed that it will seek to claw back the grant aid, which was paid to Dairygold in 2002. Assembly spokesman Rory Powell said every effort would be made to ensure that the maximum amount of aid was recovered.
He added that it had reminded the company of conditions attached to any grant aid.
These state, among other things, that "any buildings or equipment for which grant aid is paid must remain in the applicant's ownership, remain in place, be kept in good repair and used for the same purpose for at least five years from the date of completion of the project".
A Dairygold spokesman told The Irish Times that the company was in discussion with the Welsh Development Authority.
"Dairygold will honour all its obligations in full in regard to any matter arising from the closure," he said.
However, he added that the company was working with the development authority to find a buyer for the plant and had undertaken to sell the facility at an "attractive price".
He indicated that the final amount repaid in respect of the grant would be determined by the price at which it sells the plant. "All these issues are being discussed, as would be normal in these cases," he added.
Dairygold said it was forced to close the plant last month as it was operating at just 40 per cent of capacity and the company could not attract any new business. "We tried hard to build up throughput, but there is huge overcapacity in cheese packing in the UK," its spokesman said.
Dairygold took over the Felinfach plant in 2001.
