CUSTOM Foods is to increase employment by 200 as part of a £20 million investment programme at its Dundalk plant.

Announcing the investment in Dundalk yesterday, the Minister for Agriculture and Food, Mr Yates, said the Heinz subsidiary was set to become one of the key producers of frozen foods in Europe.

Customs Foods began producing pizza bases in the north Louth town in May, 1992 and currently employs 260 people.

The transfer of the Heinz Weight Watchers brand from Britain to Dundalk will result in an additional expenditure of £13 million per annum in the economy, said Mr Aidan Devenney, Forbairt Regional Development manager.

In Britain, the company has a 66 per cent market share in the Healthy Options frozen food sector. The transfer of production of pre packed meals away from a number of small companies in Britain will take place in the next two years.

A 41,500 sq ft factory extension will be constructed to cater for the new manufacturing operation. It will incorporate the latest available process technology, and at full production will have an annual capacity in excess of 60 million ready made meals.

Production on the new line is expected to start in December 1997.

In a statement, Heinz chairman and chief executive, Dr Tony O'Reilly, said: "Weight Watcher is one of the six great Heinz growth categories around the world and one of it's great success stories.

"In just seven years we have built our share of the healthy sector of the UK frozen ready meal market to over 50 per cent, with annual retail sales worth some £35 million."

The Minister also announced the establishment of a research and development facility - a European Centre of Excellence - in Dundalk, which will put it at the front of frozen food production in Europe.

He said that, given the recent closure of Key Tronic Europe in Dundalk and its replacement with APC, yesterday's developments were further recognition of the region's employment needs.