The considerable difficulties faced by Fermanagh entrepreneur Seán Quinn in developing his cement business on the Fermanagh-Cavan Border in the 1980s is charted in previously confidential files released today in Belfast by the Public Record Office.

In particular, the files highlight the formidable political and commercial opposition to the launch of Quinn’s cement industry, and serious allegations by the businessman of political and sectarian discrimination by the North’s Industrial Development Board (IDB).

The files concern an application by Quinn for IDB support for a new cement plant at Derrylin, Co Fermanagh, in 1985.

In February of that year, Quinn wrote to UUP leader James Molyneaux to convince him his cement project would not cost jobs in the existing Northern Ireland cement plants at Cookstown and Magheramorne.

“It will provide direct employment in NI for 142 persons, rising to 170 when the project becomes fully operational.”

It was economically viable and would provide lasting employment, Quinn argued.

However, his appeal was rejected by the unionist leader who informed Quinn that there was an over-capacity in cement manufacturing within the EEC.

He added: “We applaud your interest in job creation but . . . we cannot commend it as being worthy of financial support from the IDB.”

Feasibility study

The files reveal that in December 1984 Seán Quinn Ltd provided the IDB with a feasibility study on its cement project.

A marketing appraisal for the IDB found the project viable but added: "The Seán Quinn Group of companies revolves around the personality and drive of Seán Quinn . . . His death or incapacity during the construction phase could be extremely serious."

Nonetheless, the assessment concluded that Quinn’s estimate of an anticipated market growth of 20 per cent within four years was achievable.

Quinn’s proposal was considered by the IDB and on April 11th, 1985, it authorised an offer of £3.37 million – 20 per cent of eligible fixed capital expenditure – on Quinn’s cement works project.

Level of grant

An IDB official informed Quinn that the level of grant was determined by budgetary and job-creation factors.

He added: “I appreciate that you will need to bring further funds to the project to fill the gap between the grant assumed in your business plan and that now proposed.”

The proposed 20 per cent grant fell far short of the Quinn Group's expectations and on April 15th, 1985, an angry Quinn sent a long letter of protest to John Hume, the SDLP leader and MEP who had been a strong supporter of the project.

Quinn told Mr Hume his proposal to launch a cement plant in Fermanagh had "been treated in a very unsatisfactory and indeed discriminatory manner" and asked the politician to use his "great influence" with minister of economic development Dr Rhodes Boyson to have his application reconsidered at a more realistic level of special assistance.

The businessman informed Hume that his feasibility study had been studied by the IDB and consultants commissioned by it.

“None of these people have disagreed with our figures, projections or analyses; none of them found any evidence of unwarranted optimism in our study and all of them [concluded] that the project was economically and financially viable, commercially attractive and worthy of financial support from the IDB.”

Exchequer investment

The Quinn Group had adduced evidence that, at a grant rate of 40 per cent, the exchequer investment in the project would be directly refunded in 14 months.

While the official reason for offering limited grant aid was lack of funds, Quinn was convinced the real reason was grounded in political and sectarian consideration.

This included “an unwillingness to support investment in an area ‘west of the Bann’ with an overwhelmingly large nationalist majority – in effect, a form of religious discrimination”, and concern that “employment in more staunchly unionist areas might be affected”.

Quinn went so far as to allege that the IDB’s decision “could be construed as a deliberate attempt to force the Seán Quinn Group into liquidation with the consequent loss of 110 existing jobs”.

The SDLP leader referred Quinn’s letter to Dr Boyson .

This prompted a memo from another IDB official confirming Quinn's allegation that the hostility of existing companies such as Blue Circle in the North and Irish Cement in the Republic were a factor in the decision to deny him a larger grant.

Marketplace fight

The IDB was convinced that the two companies were “prepared to fight Quinn to the death in the marketplace”.

There was also a danger that Blue Circle would close its Magheramorne plant near Larne.

The official suggested that the minister should advise Hume “that the IDB has gone to the limit of what it can justify in the offer of assistance [to Quinn]”.