Forklift manufacturer Moffett Engineering will create 40 jobs at its Dundalk operation in a €6 million investment.

The expansion will follow the new year merger of Moffett with its Dutch sister company Kooi, both of which are part of the Partek Cargotec Group.

The investment will see the establishment in Dundalk of a centralised component centre, producing masts for truck-mounted forklift assembly units in the Republic, the Netherlands and the US.

The decision to locate the new "centre of excellence" in Dundalk was a huge vote of confidence in the factory, said Mr Keith Quigley, general manager of Irish operations. The expansion, which will also see a painting facility opening in Louth, will take place over the next three years.

"Our component production will almost double and our paint facility will rival those found in the automotive industry," said Mr Quigley. "In addition to manufacturing components and masts for the current range of truck-mounted fork-lifts produced at the facility in Dundalk, we will also be manufacturing and exporting masts and components to the other truck-mounted forklift assembly units within the ... group," he said.

With Moffett and Kooi effectively competing against each other, a merger made common sense said Moffett spokesman Mr Mark Hignett.

"Although both organisations were part of the Partek Cargotec Group, we effectively competed with each other. It was therefore a logical decision to combine ... resources," he said

Moffett has traditionally enjoyed heavy sales in the US and Britain while Kooi has been stronger in Germany and the Netherlands.

The merger is expected to boost efficiencies but no layoffs are anticipated as a result.

"The strengths of both organisations have been joined together to ensure that it is the customer who will benefit the most," said Mr Dick Vroonland, general manager of Kooi.

"As well as greater choice, we have also joined our sales and distribution operations."