The new chief executive of IDA Ireland, Mr Sean Dorgan, has said he is "hopeful" that at least one, and perhaps two, new companies will invest in Co Donegal within the next two months.

Mr Dorgan, who was giving his first public speech since taking up the IDA Ireland post, was addressing the Chamber of Commerce in Letterkenny yesterday. He accepted that there had been a regional imbalance in job creation over recent years, with the eastern part of the State benefiting most. He said Donegal was now "a major priority area for IDA Ireland to deliver results quickly".

Some 900 jobs will be lost in Donegal over the next two months, with the closure of three Fruit of the Loom factories and the Donegal Shirt Company. It was important the IDA was "seen to be responding" to the needs of the regions, said Mr Dorgan.

The agency would work to achieve better results in the 15county area being submitted by the Government to the EU as an Objective 1 region for structural funds.

"The Objective 1 region will need greater development and we will have to do more and achieve better results in these areas," he said.

"We will be concentrating greater efforts and using the incentives available to us to favour the regions which haven't grown as much in recent years," he added. Foreign investors locating in an Objective 1 area could be offered grant aid of up to twice that permitted in other regions. In the past six months 11 companies had been brought on site visits to Donegal and some had returned for a second time. Three were involved in ongoing "detailed discussions", he said.

"I am hopeful that within the next two months at least one company, and possibly two, will crystallise into real investment in this area," Mr Dorgan said.

On the issue of factory closures, Mr Dorgan said job losses had to be accepted as "a normal part of the industrial development process". "The Fruit of the Loom crisis, Donegal Shirt, Krups in Limerick, Apple in Cork are not unexpected situations which arise out of the blue. IDA anticipates a constant level of job losses in some overseas industries as a normal part of the industrial development process," Mr Dorgan said. The same situation applied to indigenous, Irish-owned enterprise, and was not unique to Ireland.

Mr Dorgan said there were a number of key issues in the north-west which were outside the IDA's direct remit but affected its success rate. The peace process was of primary importance as the Northern violence had held Donegal back. Access to the region had to be improved; the Letterkenny to Dublin route required "extensive upgrading".