URGENT talks are under way between the owners of Asahi in Killala, Co Mayo, and State agencies to try to save the 320 jobs at the plant.
It is understood that senior IDA Ireland and Forbairt executives are holding talks with the Japanese owners to try to find a way to safeguard the future of the loss making operation.
Asahi is one of the biggest employers in the west of Ireland, manufacturing synthetic fibres in Killala. One of its plants is involved in fibre production - essentially a chemical operation - and the other in spinning the synthetic yarns.
It is believed that its Japanese owners have signalled to the State agencies their intention to pull out of the Irish operation, which has been a consistent lossmaker. In recent years the plant has suffered from a sharp increase in the price of its main raw material, acrylonitrile, and competition from low cost producers.
The IDA and Forbairt are understood to be discussing a number of options with the Japanese owners, including the possibility of a management buyout of the operation, perhaps involving some remaining involvement by Asahi. However, given the losses being suffered, it is not clear what chance the talks have of finding a way forward.
The difficulties at Asahi are likely to cause political problems for the Government in the revamped Mayo constituency where there will be a major fight for seats in this year's general election. There has been strong criticism of State agencies for the lack of industrial development in the region, with no major new projects being located in the area in recent years.
Senior industry sources in Ballina confirmed yesterday that talks on the future of the plant have been in progress with IDA Ireland for some time. The managing director of Asahi's Irish operations, Mr Michael Honan, was in Dublin yesterday but he was not available for comment.
Mr Honan would be involved if there was to be a management buyout, although it is not clear how such an operation would be funded, as it is understood that major investment would be required to give any chance of viability.
A plea was issued by Ballina" Chamber of Commerce for the company's future to be secured with the active help of Irish agencies.
IDA Ireland's president, Mr Oliver Rouse, said every effort had to be made to ensure the plant's survival, whether through restructuring and refinancing by its parent company, bringing in new investors or facilitating a management buy out.
"Asahi is a major employer in the region. Many young people get a good income from Asahi. Its loss would have detrimental, knock on effects for the whole economy," he added.