DG Employment, Social Affairs and Inclusion
European Globalisation Adjustment Fund /
Application form for a financial contribution from the
European Globalisation Adjustment Fund (EGF)[1]
Applications must be submitted formally in writing by the competent authority of the applicant Member State to: within 12 weeks of the date on which the criteria set out in Article 4(1) or (2) of the EGF Regulation are met.
The submission must consist of the following documents:
1. the completed and signed application form (scanned as a PDF document, including all pages);
2. the same completed application form (as a Word document);
3. a completed financial form (as an Excel document)[2];
4. a statement indicating that the Legal Entity Form[3] and Financial Identification Form[4] submitted previously are still valid, or a new completed Legal Entity Form and/or Financial Identification Form (as PDF documents, duly signed and stamped).
Please fill in the boxes below:
Applicant Member State: / IRELANDMain enterprise concerned (if applicable): / ANDERSEN IRELAND LIMITED
Economic sector(s): / NACE 32
Region(s): / IE02 - SOUTHERN AND EASTERN
EGF reference (to be completed by the Commission)
A – Applicant
A.2 Authority responsible for the management and financial control of the requested financial contribution from the EGF: / Name:
Department of Education and Skills
Address:
Marlborough Street, Dublin 1, Ireland
Function of the authority:
EGF Managing Authority
A.3 Contact details of the person(s) responsible for the implementation of the proposed actions: / Name:
John McDermott
Address:
Department of Education and Skills,
Floor 2, Block 1,
Marlborough Street, Dublin 1
Function:
Assistant Principal Officer
Telephone:
00 353 1 889 6707
E-mail:
A.4 Financial details:
Please complete the Legal Entity Form and the Financial Identification Form and include them as an annex to this application form or provide a statement that these forms have been submitted previously and can be re-used. / [The forms can be downloaded in all languages from: http://ec.europa.eu/budget/contracts_grants/info_contracts/financial_id/financial_id_en.cfm and http://ec.europa.eu/budget/contracts_grants/info_contracts/legal_entities/legal_entities_en.cfm. ATTACHED SEPARATELY
B – Context of the redundancies
(cf. Article 8(5)(c) of the EGF Regulation.)
Andersen Ireland, a subsidiary of Pierre Lang, established a jewellery production plant in Rathkeale, Co Limerick in 1976. Andersen Ireland was one of two manufacturing plants for the Pierre Lang Group, the other based in Vienna. The Rathkeale plant manufactured jewellery on a made-to-order basis for Pierre Lang. The products were then transported to Vienna in a finished or semi-finished state.
The Pierre Lang Group, established in 1961 and headquartered in Vienna, is a jewellery and accessory designer and producer. The company is one of Europe’s largest manufacturers of jewellery and is one of the world’s few fully integrated jewellery businesses. The Pierre Lang Group was bought by Herr Helmut Spikker in January 2010.
In August 2011, following protracted negotiations over the question of loan re-payments Raiffeisenbank Bank requested that Pierre Lang be put into receivership.
In December 2012, SMB (Schoeller Metternich Beteiligungen) a Germany private equity firm acquired all the assets of Pierre Lang. The acquisition deal closed in January 2013. SMB Group, based in Munich, is a private equity company who invest predominantly in traditional German/Austrian industries.
The industrial development agency, IDA Ireland, was actively engaged with Andersen Ireland on the development of a transformation agenda throughout 2012. Although often delayed, due to leadership changes and legal proceedings in the Austrian courts, IDA had successfully positioned Anderson Ireland as a value option for potential buyers during the 2012 sale.
Though the company was attempting to work through enterprise challenges, in mid-August 2013, with no immediate solution forthcoming, senior management in Austria, led by investors, made the decision to voluntarily put Andersen Ireland into liquidation with KPMG appointed as receivers.
The full workforce complement of 171 workforce have been made redundant with the first workers laid off in late October 2013.
Andersen Ireland was for some 37 years, until the end of 2013, a significant employer in the Rathkeale area of Co. Limerick. This area suffers from significant social deprivation impacts. Of the 171 strong workforce 119 workers (69.6%) were female.
The enterprise has been in place since 1976 so, being long established, its closure was to many shocking and highly impactful. Global factors, the background of which is summarised below, had been impacting for a number of years recently. The enterprise’s turnover fell from €18m in 2008 to €8.9m in 2012 with the wages bill almost halving from €7m to €3.9m. Materials and overheads costs fell from €11.1m in 2008 to €3m in 2012, 55% of which related to Irish suppliers.
The closure of the plant and redundancy of all 171 workers has had a major impact on the local economy and community.
► Section B.2a below must be completed if the application is based on major structural changes in world trade patterns due to globalisation.
► Section B.2b below must be completed if the application is based on a continuation of the global financial and economic crisis addressed in Regulation (EC) No 546/2009[5] or a new global financial and economic crisis.
B.2a Please provide a reasoned analysis of the link between the planned or actual redundancies or cessation of activity and major structural changes in world trade patterns due to globalisation, or the serious disruption of the local, regional and/or national economy caused by globalisation:
(cf. Article 8(5)(a) of the EGF Regulation.)
This analysis should be based on relevant statistical data and other information, which should demonstrate the existence of major structural changes in world trade patterns such as (i) a substantial increase of imports into the EU, (ii) a serious shift in the EU’s trade in goods or services, (iii) a rapid decline of the EU market share in a given sector, or (iv) a delocalisation of activities to third countries, or (v) the serious disruption of the local, regional and/or national economy caused by globalisation. This analysis should be based on statistical and other information at the most appropriate level to demonstrate the fulfilment of the intervention criteria set out in Article 4 of the EGF Regulation.
Many of the major EU based jewellery manufacturers have, in recent years, been re-locating to developing countries in the Far East. China and Thailand together with India, Philippines and Indonesia have been the main beneficiaries of this global shift. This is borne out in a study commissioned by the industrial development agency, IDA Ireland, in seeking to interest potential UK buyers for Andersen Ireland Limited in 2013. A copy of the study is attached with this application. It found that the majority of major jewellery buyers were now located in China. In addition to this, a number of key UK and global players such as Pandora, Links of London and Folli Follie have relocated to far eastern locations. Thailand has become a major manufacturing centre with, for example, the world famous company, Swarovski, based there now.
This globalisation of the jewellery manufacturing industry is also illustrated in a market survey into the jewellery market in the EU, conducted by the Dutch Ministry of Foreign Affairs Centre for the Promotion of Imports from Developing Countries (CBI) and published in September 2008.
The survey has found that as a jewellery production centre, in world terms the EU shrunk between 2003 and 2007 whilst production in the developing countries outside the EU - particularly in China and India - showed very significant increases over the same period. For example, as per the World Gold Council, global demand for gold for the production of jewellery items rose overall between 2003 and 2007 from 2,322 tonnes to 2,407 tonnes, a rise of 3.6%. However, over the same period whilst demand for gold for jewellery production in India and China over this period rose by 24% and 29% respectively, in Italy, Germany, UK and France, demand fell over the same period between 8 and 11% depending on the individual country.
The survey also includes figures, provided by EUROSTAT, on EU jewellery manufacturing imports between 2003 and 2007. These figures show that between 2003 and 2007, both in the context of jewellery manufacturing volume and total value, rises were most pronounced in developing countries outside the EU. Between 2003 and 2007 the manufacturing volume of jewellery in the developing countries rose by over 100%. This compares with a rise in manufacturing within the EU of just over 20% over the same time period.
The overall value of imports from developing countries outside the EU also rose very significantly by over 55% between 2003 and 2007 whilst the value of manufactured jewellery within the EU rose less significantly, by 39.76%. This despite the fact that the total value of EU-manufactured jewellery in 2003 was significantly lower than that of the developing countries which theoretically would have suggested the potential of a larger percentage rise in value going forward.
In setting out the role of developing countries, the survey provides further evidence to support the 2013 IDA Ireland study findings referenced above. It states that China, India and Thailand dominate the supply of jewellery from developing countries. In 2007, for example, China, Thailand and India together accounted for 80% by value (€4,889 million out of a total of €6,074 million (see Table 2 below)) of developing country supplies of jewellery to the EU.
In terms of volume of manufactured jewellery into the EU, the survey has found that China is particularly dominant amongst the developing countries, accounting for some 83% of total volume (61,357 tonnes out of a developing countries’ total of 73,740 tonnes (see table 3 below)) into the EU in 2007, whilst India and Thailand are noted for being leading suppliers of gold, silver and diamond jewellery articles. In this context, it is not surprising that the market survey has found that jewellery fabrication in developing countries as a percentage of all imports from outside the EU rose from 84.5% in 2003 to 91.9% in 2007.
To cite Ireland alone, between 2003 and 2007 the volume of jewellery imported from developing countries, including China, India and Thailand, rose some 250% from 128 tonnes to 450 tonnes, with the overall value of such imports doubling from €9 million in 2003 to €18 million in 2007.
Tellingly, the market survey also found that between 2003 and 2007 the volume of jewellery manufactured in the EU as a percentage of the entire EU jewellery market shrunk from 35.8% in 2003 to 26.4% over the same four-year period. These figures are backed up in the survey by figures which show that between 2003 and 2007 EU production of precious jewellery actually fell by 1.9% - 10,995 tonnes being manufactured in 2003 down to 10,201 tonnes in 2007.
Table 1 below compares the demand for precious metals in major countries for the production of jewellery, referenced above, between 2003 and 2007 against the overall global demand. Tables 2 and 3 set out the respective value and volume figures for manufactured jewellery in the EU market between 2003 and 2007. They also include some key statistics as cited above:
Table 1
2003 (volume in tonnes) / 2007 (volume in tonnes) / Difference (%)
Gold (world) / 2,322 / 2,407 / 3.6
of which
India / 502 / 624 / 24%
USA / 368 / 364 / -2%
China / 223 / 289 / 29%
Italy / 320 / 286 / -11%
Turkey / 171 / 188 / 10%
UK / 67 / 62 / -8%
France / 37 / 34 / -8%
Germany / 27 / 24 / -11%
Source: GMFS, World Gold Council (2008)
Table 2
Value of jewellery imports into the EU / 2003 Value (€m) / % of total value in 2003 / % of total Extra-EU value in 2003 / 2005 Value (€m) / 2007 Value (€m) / % of total value in 2007 / % of total Extra-EU value in 2007 / Change in value 2003-2007
Total EU,
of which sourced from / 11,092 / 100 / 13,405 / 15,775 / 100 / 42.22%
Extra-EU / 8,074 / 73 / 10,203 / 11,557 / 73 / 43.14%
Extra-EU of which sourced from Developing countries / 3,916 / 35 / 49 / 5,212 / 6,074 / 39 / 53 / 55.11%
Source: CBI, Ministry of Foreign Affairs of the Netherlands, September 2008. (Figures from Eurostat (2008)).
Table 3
Volume of jewellery imports into the EU / 2003 volume (tonnes) / % of total volume in 2003 / % of total Extra-EU volume in 2003 / 2005 Volume (tonnes) / 2007 Volume (tonnes) / % of total volume in 2007 / % of total Extra-EU volume in 2007 / Change in volume 2003-2007
Total EU, of which from: / 66,031 / 100% / 86,141 / 109,023 / 100 / 65.11%
Extra-EU / 42,390 / 64.20% / 68,893 / 80,236 / 73.60% / 89.28%
Extra-EU of which from developing countries / 35,829 / 54.26% / 84.52% / 61,495 / 73,740 / 67.64% / 91.90% / 105.81%
Source: CBI, Ministry of Foreign Affairs of the Netherlands, September 2008. (Figures from Eurostat (2008)).
These figures are also indicative of another marked shift in Union sourced production within the jewellery manufacturing industry, which has resulted from the move to on-line sales rather than a physical sales service. In effect, a virtual or global approach has usurped the traditional EU point of sale model.
This has particularly impacted on Andersen Ireland Limited which based its operational model on a European sales force of some 5,000 operatives in the 2010 – 2012 period. This fell latterly to c. 3,200 at a time when an estimated 4,000 experienced operatives was required to break even within the enterprise’s overhead structure. Despite investment, change and a rebuild and restructure plan for its European sales teams, the enterprise was unable to expand or sustain growth. Third country enterprises such as the US company Stella Dot have profited from the move to globalised on-line sales.
Moreover, it has become apparent that unless an enterprise has established itself as a global brand, for example considering the business strategies of Pandora, Swarovski and Folli Follie referenced above and in the IDA Ireland study, then it faces major difficulties in surviving a highly competitive marketplace where production is more and more based in low cost economies outside the EU and in a sales environment of global proportions and without barriers.