It is not all doom and gloom for the textile sector in Co Donegal - a point which will undoubtedly be made today when the Taoiseach, Mr Ahern, officially opens new premises at Clubman Omega in Buncrana.

Clubman Omega, which makes shirts for the middle to upper end of the market, has proven that the fortunes of a clothing company can be turned around in quite dramatic fashion.

In the first year of trading under the current management in 1986 the annual turnover was £800,000, (€1 million) but this has now grown to just under £4 million. In the mid-1980s the company went into receivership twice.

Today's opening is a reflection of changed fortunes. The company moved into the new premises on a greenfield site just outside Buncrana in January and around £250,000 has also been invested in automatic cutting equipment. This investment will increase the cutting capacity, which up to now has been a key limiting factor, from 6,000 to 15,000 shirts a week.

Clubman's managing director Mr Sean Tighe, said that production is currently running at about 7,000 shirts a week, but that discussions were ongoing with a major British customer and he expected output to increase significantly within a few years.

Turnover has grown at around 20 per cent per annum over the past three years; the company now employs 140 people, but this is expected to increase to 185 over the next three years.

Mr Tighe, a Sligo man, initially got involved in the company, then called Clubman, as a member of the accountancy firm appointed as receivers in 1984. At that point it was bought by a US company Cloverhill, but almost one year later was back in receivership.

"I saw from the start that there was quite considerable potential in it if it was managed properly and sensible decisions taken. There was a good product and a good staff, and they had a market, so it was a matter of making things go efficiently and selling at a more profitable price," Mr Tighe said.

After the company went into receivership for a second time, four local men, three of whom had worked at the company at various stages, bought the assets for about £250,000. They asked Mr Tighe to run the company and he subsequently put in equity as well.

The new management, he says, had the advantage of being based locally, and the company is now "quite profitable". In 1984, Enterprise Equity, the venture capital arm of the International Fund for Ireland had taken a 30 per cent share, but this has now been bought back.

"The big thing was just carving out a place in the market for us, by concentrating on our strengths. We certainly couldn't compete with low-cost imports from Far Eastern counties.

"The product was good, so we could aim for the middle to upper end of the market.

"So it was developing a market-led approach and working very closely with our customers at all levels," he says.

The company has some 300 accounts with retailers throughout the Republic and private label business accounts for about 25 per cent of total output. Customers include John Rocha, Thomas Pink and Saks in New York. About half of Clubman's production is exported and a sales manager has just been appointed in London.

"The core business of selling to individual retailers was always the strength of Clubman," said Mr Tighe. "The contacts in the designer end of the business is all new business developed in recent years and is in response to market needs."

Mr Tighe said the loyalty of the workforce, which is 95 per cent female, was also an important factor in the company's success over recent years. Shirt-making had been going in the premises recently vacated by Clubman since 1894, and three generations of some families have worked at the company.

The introduction of the euro has "helped amazingly", because practically all of the fabric is bought in different European countries, and with currency fluctuations removed a lot of uncertainty has been lifted, Mr Tighe said.

Donegal's dependence on textiles is often cited as a problem. About 45 per cent of all manufacturing employees worked in the textile sector, but this figure includes Fruit of the Loom workers. The US company was by far the biggest employer in the county with more than 2,000 workers, before the impending job losses were announced.

Mr Tighe believes the indigenous textile sector can grow in Donegal. Smaller operations, he says, can adapt quickly in response to market changes, and many of the Donegal companies have grown from small family-owned businesses, and therefore know their product and their customers very well.

Mr Tighe is also the chairman of the Western Development Commission, the statutory body charged with spearheading economic and social development in the seven western counties from Donegal to Clare. He does not accept that Donegal has to suffer because of its location, saying peripherality is "a state of mind". With greater encouragement, indigenous companies in the county could increase employment significantly, he said.

"According to the text books, we should not exist, but we are very successful. We can do it in north Donegal, so why can't several other people do it, but they need encouragement.

"They need to be actively assisted and Government needs to understand that greater resources are needed to encourage people to locate in areas that are peripheral," he said.