Food packaging manufacturer Holfeld Plastics will spend €3.5 million on expanding the business over the next two years following its acquisition by US player Waddington.

Wicklow-based Holfeld is currently recruiting seven people to work at its Arklow plant, which produces plastic packaging for food processors in Ireland and Europe.

According to site manager Frank Coleman, the plant is working around the clock to cope with increased demand from European customers.

Waddington bought the company last September and is backing an expansion of its operations designed to meet growing demand from its main markets in Europe.

The company will spend €500,000 this year and €2 million in 2016 on its proposed expansion at Avoca.

Kentucky-based Waddington is owned by Olympus, a US fund that manages assets of $5 billion and whose clients are mainly made up of public- and private-sector pension schemes.