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Dell to put $250 million in Ireland

The investment will nearly double Dell's capacity to serve the European market, the world's second largest.

Dell Computer (DELL) announced a $250 million Irish investment that includes purchase of a Limerick manufacturing facility needed to keep up with direct vendor's yearly growth rate of 45 percent in Europe.

The investment will nearly double Dell's capacity to serve the European market, the world's second largest, as well as the Middle East and Africa. Dell is Europe's fifth-biggest PC vendor, according to third quarter 1997 figures from International Data Corporation, drawing 22 percent of its revenue from that continent last fall.

Dell will acquire and refurbish an existing plant on a 35-acre site in Castleroy, Limerick, and said it intends to purchase land near its current Raheen, Limerick, facility as well as sales offices located elsewhere in Ireland and the United Kingdom. Which Dell products will be manufactured at which plant couldn't be determined.

The Castleroy facility will begin shipping products by early summer. Dell's entire line of desktops, notebooks, workstation, and server computers are available in Europe, according to a Dell spokesperson.

"Reading between the lines, acquiring a new building is going to let us expand much more quickly. [It's] evidence of prosperity, of demand in Europe," the spokesperson said.

The agreement is being touted by Dell and the Irish government as one of the country's largest-ever job creation schemes. Between 2,000 to 3,000 people will come on board in manufacturing, finance and administration, and customer service, according to Dell and Irish officials. With 1,800 employees already in place, Dell is currently among Ireland's top ten foreign-based employers. Chipmaker Intel is the largest non-Irish employer in the Emerald Isle.

Deputy Prime Minister (and Minister for Enterprise, Trade, and Employment) Mary Harney joined Ireland's Industrial Development Agency (IDA) in negotiations with the PC manufacturer. The IDA's charge runs from drawing high-tech manufacturers to Ireland to ensuring that Irish secondary and college-level schools offer industry-oriented electronic engineering, computer science, and business courses. Dell expects to recruit and retain local personnel for its operations.

Foreign manufacturers are typically attracted to Ireland because of the country's low corporate tax rate of 10 percent; the average among European Union countries is closer to 30 percent. Ireland also offers fiscal incentives.

The news follows one month after Seagate Technology said it would close a hard disk drive plant in Clonmel, causing the loss of 1,400 jobs. Seagate announced it would lay off 10,000 workers, one-tenth of its work force, before detailing a quarterly loss of $183 million earlier this week.

Reuters contributed to this article.