Ikea invests in Portugal

Swedish furniture giant Ikea plans to invest 32 million euros to build a factory in Portugal aimed mostly at the export market, the country's Economy Minister Manuel Pinho said on Tuesday.

It will be set up in the town of Ponte de Lima, some 400 kilometres north of Lisbon, create some 450 direct and indirect jobs, and export about 90 percent of its production, he told state radio RDP.

The location was selected by the firm because of existence of an Atlantic port nearby and the presence in the area of several furniture manufacturers who will be eligible for sub-contracting by the Swedish gaint, the minister said.

“This is an extremely interesting project by a firm which has a great capacity for design and marketing,” Pinho told the radio station.

The Portuguese government and Ikea were to sign later on Tuesday a memorandum of understanding outlining the plan to set up the factory, the first by the Swedish firm in Portugal.

Ikea opened its first-ever store in Lisbon in June 2004 which has exceeded the firm’s initial sales projections and it plans to open a second outlet near second-city Oporto in 2007.