Clothing manufacturer Fruit of the Loom, which is planning to lay off more than 500 Irish workers next year, made profits of €4.2 million in Ireland in 2004.

The US-based company announced yesterday that it is bringing forward the scheduled closure of its factories in Donegal and Derry to the middle of next year. Last year, the company announced that it planned to close the plants by the end of 2007 and shift their operations to Morocco, to take advantage of lower wages.

But it has recruited new suppliers for the products manufactured in Ireland, and has decided to speed up the factory closures.

The plants, in Buncrana, Co Donegal and Campsie, Co Derry, employ a total of 640 people in knitting, cutting and dyeing fabric.

The majority of the jobs will be lost in the first half of next year, but 100 workers will be kept on to aid the transfer of the operations to Morocco.

The job losses will come in a region where unemployment is already 20 per cent, close to five times the national rate of 4.4 per cent. Donegal accounts for six out of every 100 unemployed people in the State.

Local Siptu general secretary Seán Reilly criticised the Government yesterday for failing to tackle the problem, despite knowing that Fruit of the Loom, one of its biggest employers, was eventually going to leave.

"The biggest complaint is that the Government has known this was going to go since 1998," he said. "They have had six years to secure alternative jobs and they have done nothing."

Since 1997, the departure of Fruit of the Loom operations for locations with lower wages has cost Derry and Donegal a total of 6,500 jobs.

Mr Reilly pointed out that a Government task force set up six years ago to deal with the jobs exodus from the region was told it would need to create 9,950 new jobs. "Instead, they have lost 6,500 jobs in that time," he said.

This announcement combined with recent closures such as Clubman Shirts bring the total number of job losses between Derry and Donegal during this year to over 1,000.

Both counties depended heavily on the textile business, which has completely decamped to low-cost countries.

Fruit of the Loom's most recent accounts show its Irish business had pretax profits of €4.2 million in 2004. Sales were level with 2003 at €139.2 million.

The cost of sales grew by €3 million on 2003 to €118.2 million, while administrative expenses fell by €6 million to €18.8 million. The company benefited from the waiver of a €5 million liability owed to other group subsidiaries.

This left it with a €6.5 million operating profit for the year, compared with a €1.1 million loss in 2003.

It had to pay €2.5 million for restructuring associated with the closure of other elements of the Irish business. This included the repayment of €568,000 in grant aid to IDA Ireland. In 2003, it had a restructuring charge of €362,000.

The restructuring costs and interest payments left it with pretax earnings of €4.2 million. This cut the accumulated losses on its profit and loss account to €80.1 million from €84.3 million.

Shareholders' funds at the end of 2004 stood at €25 million, compared with €20.7 million a year earlier. The company had debts of €157.4 million. Of this, it owed €150 million to its US-based parent or other group companies.

A US-based spokesman could not comment on the Irish company's accounts last night. However, he confirmed the plans to bring forward the closure of the Derry and Donegal factories.

Financier Warren Buffet's Berkshire Hathaway owns Fruit of the Loom.