A CLOTHING factory on Achill Island, the areas only substantial employer, closed yesterday with the loss of 35 jobs. It is understood that the factory, which had only been trading for 14 months, may have debts approaching £500,000.

The factory, which traded under the name Gairmeidi Mhaigh Eo Teo, manufactured workwear, mainly for export to Britain. Udaras na Gaeltachta is a substantial creditor and is owed in excess of £250,000.

Udaras appointed a receiver to the company last week, but yesterday said he had told them that he had no option but to close the factory because of the company's continuing trading losses.

Udaras said the closure of the factory and consequent loss of 35 jobs was a serious disappointment.

"It is a setback to the efforts that were being made by the organisation to strengthen the employment base on Achill Island," it said.

"Substantial State support has been provided to Gairmeidi Mhaigh Eo Teo since its establishment 14 months ago but, notwithstanding that, the company failed to achieve its targets and suffered substantial losses during its short period of trading," the organisation said.

The company was situated in a refurbished factory on the local industrial estate. Udaras provided grants, training and some capital investment.

Last night, local county councillor, Mr Pat Kilbane, who has been in touch with the receiver and the company, said he hoped that something could still be salvaged.

The company, he said, now had very well trained employees and every effort should be made to restart the factory.

Mr Kilbane said he was optimistic that a package could still be put together, to rescue the company. He said the company's production methods were first class and the markets were still there.

Mr Kilbane said it became apparent some time ago that the factory could not achieve its targets and several meetings were held between the company and Udaras representatives to try to redress the matter.

He said the company's problems become even more apparent last February and Udaras had advised the company to try to get in a partner. However, he said the company's credit situation became worried prior to closure and a receiver was appointed on August 8th.

The factory was established by Mr Jim Aspinall, originally from Britain. Industry sources said he was well known in the clothing sector for his work as a consultant, advising on wild class manufacturing.

Neither Mr Aspinall nor the receiver could be contacted last night. It is said that there could be up 40 trade creditors. The ESB and Telecom Eireann are said to be substanial creditors.

Udaras said last night that it "recognises the need to source further investment for the Achill area and is addressing that as a matter of urgency".