Criminals are believed to have been making a profit of more than £350,000 a week from a massive diesel-laundering operation which was raided by Customs officials from Dundalk yesterday morning.
A 24-year-old man from Co Monaghan was found in the plant and detained for questioning by customs officers.
It is believed the operation was run by criminals who realised the massive profits to be made if they could evade customs officials.
The plant was laundering red diesel, which is sold in Northern Ireland and intended for agricultural use. About 12,000 gallons a day were being treated with acids to remove the dye and allow the "clean" diesel to be sold to motorists as auto diesel.
The operation was being run from a large shed in a farmyard in the Hackballscross area, about seven miles from Dundalk. The border with south Armagh runs at the rear of the shed.
Customs officers believe a network of outlets on both sides of the Border are used to sell the laundered diesel.
They warned that traces of sulphuric acid and hydrochloric acid, which are used in the process to remove the dye, are usually found in the washed diesel. This is known to damage the injector pumps in diesel engines.
Among the equipment seized and dismantled yesterday were four storage tanks and two tanks of acid.
One customs officer said that about 12,000 gallons a day was being processed and claimed the plant would have been run on a 24-hour basis for up to four days a week.
It is not believed that subversives were involved. The plant is thought to have been in operation for a month.
The tankers containing the red and washed diesel were concealed in large lorries and transported across the Border to a series of outlets where it was sold as auto diesel.
One source said this laundering operation had been nearly perfected and the gang obviously had industrial chemists available to it. None of the equipment was visible from outside.
This is the fourth such seizure by Customs officers in the Dundalk region in the last six months.