IDA Ireland has set up a working group to find replacement industries for Mullingar, Co Westmeath, after one of the town's largest employers, Tarkett Ireland, announced it was to close with the loss of 140 jobs.
The company, which produces resilient flooring, says the decision to close comes after "unexpected changes in the market place" and, in particular, declining sales in Russian and eastern European markets.
The first 50 workers will be let go next month and the company expects all staff to be made redundant by the end of January. It says it will offer all employees an "equitable" redundancy package, which is to be negotiated with the union at the plant, SIPTU.
The decision to close was taken by Tarkett Sommer AG, the parent company, which is located in Germany. A joint statement by the Irish company and Tarkett Sommer AG said the closure resulted from "needs to reduce drastically the costs of production to maintain profitable residential resilient flooring activity".
"The reasons for closing the Mullingar plant include the actual cost of the products which remains substantially higher than other factories," it added.
The company said the distance from "the main markets" for its products and "high transportation costs for raw materials and finished goods" were other reasons behind the decision.
The company's decision surprised some in the town as only last year an investment plan to modernise the plant, worth between £4 million and £5 million, was implemented.
Ownership of the plant has changed many times since the company's establishment 20 years ago and the plant has not received any IDA grants since about 1984.
An IDA spokesman said the 400,000 sq ft plant would be an attractive site for replacement companies.
"Its only an hour away from Dublin and there is a well educated and available workforce there, so the chances of getting new industries are good," he said. He added that the IDA did not envisage one replacement industry, but a number of smaller ones, taking up space in the plant.
The company has stated its commitment "to work closely with the IDA to market the facility for alternative opportunities".
The Tanaiste Ms Harney said finding alternative industries for the town was "an immediate priority".
One of the TDs for the constituency, Mr Willie Penrose of the Labour Party, said, for Mullingar, the closure could be compared to the loss of Galway Crystal and Seagate in Clonmel, Co Tippeary. He said "entire families and communities depend on this plant and I firmly believe that unless a replacement employer is found without delay, the knock-on effects will be felt by many hundreds".
Another TD for the area, Fine Gael's Mr Paul McGrath, said many spin off jobs, for example in the areas of transport, stationery, catering, cleaning, would also be lost because of the closure.
