SEAGATE TECHNOLOGY is to invest £120 million (€151 million) at its plant in Springtown in Derry over the next two years. However, the new investment will not result in the creation of any additional jobs in the North.

Seagate Technology said the investment will be directed into new equipment, research and development, infrastructure and IT systems. The US group claims this multimillion-pound vote of confidence in its Derry facility will help position it as a "global technology leader".

Seagate's Springtown facility specialises in wafer fabrication. The group develops and manufacturers recording heads at the Derry site, one of the key components in hard-drive products.

Seagate has two operations in Northern Ireland which employ more than 2,200 people. Its second facility in Limavady is in the process of being closed.

The Limavady facility, which produces nickel-plated aluminium substrates, is scheduled to close in three months' time with the loss of nearly 1,000 full-time and part-time jobs. The group said it had made the decision to transfer its substrate operation from Limavady to Malaysia because of lower operating costs.

John Spangler, Seagate Technology vice-president at Springtown, said the new investment in the Springtown plant would "enable it to remain at the forefront of the technology and efficiency battle that is waged in the disc-drive industry".

Mr Spangler added: "This will allow our Springtown facility to continue supporting Seagate's market-leading position in the ever-expanding hard disc-drive market. Springtown is already one of the leading producers of read-write heads in the world and is the primary supplier of heads for Seagate; this is a position that will be enhanced by this new investment."

The facility is one of the biggest producers of read-write heads in the world while retaining a low cost base.

According to Mr Spangler, despite its decision on Limavady's future, Seagate remains committed to its operation in Derry.

"The success of this factory since it started production in 1994 and the continued success we see for it into the future are evidence of Northern Ireland's capacity to compete in the global marketplace.

"Northern Ireland has all of the right ingredients, including a business-friendly environment, a wealth of talent from a well educated, flexible and committed workforce, and an understanding of the importance of the knowledge-based sector for future economic development," he added.