US pharmaceuticals group Pfizer will create up to 200 jobs with a €240 million investment in its Dublin manufacturing operation.

The announcement, made by the Taoiseach, Mr Ahern, yesterday, will see employment more than double at the company's sterile manufacturing and freeze-drying operation in Dún Laoghaire.

"Once again, Pfizer is demonstrating its confidence in Ireland," said Mr Ahern. "The expansion of the Dún Laoghaire plant is certainly good news for the continued growth of Ireland as a key strategic location for pharmaceutical manufacturing and investment and in terms of high-quality job creation."

The Taoiseach said that investment in pharmaceutical innovation was "essential to our future economic wealth and the health of our citizens".

The investment is one of the largest in the State this year and was won against strong internal competition from the group's other sites.

Pfizer intends to begin construction next year, subject to planning permission, and the project is scheduled to come online in 2008. The company does not anticipate any difficulty in securing planning, given that its proposal amounts to an extension of an existing manufacturing plant.

The president of Pfizer Global Manufacturing, Mr John Mitchell, said: "The expansion of Pfizer's manufacturing capability at Dún Laoghaire reflects our continuing commitment to invest in Ireland.

"The skilled workforce and welcoming business environment in Ireland serve as a model for other countries that wish to attract or retain a vibrant pharmaceutical industry presence."

The managing director of Pfizer Healthcare Ireland, Mr Dave Shanahan, said Ireland's modern and efficient plants were a key element in securing the project.

"Ireland is well positioned to continue to attract multinational pharmaceutical investment due to a favourable domestic environment, a highly skilled workforce and Government health improvement policies that provide access and support innovation," Mr Shanahan said.

The plant extension will provide additional capacity both for the increased supply of drugs already produced at the plant and others that are still in the company's pipeline. It will involve the construction of a new freeze-drying unit, laboratories, warehousing space and administrative support areas.

"The reality is that, once we get close to 80 per cent of capacity, we are looking at plant management for the future," said Mr Shanahan.

A spokesman for IDA Ireland, which is supporting the investment, welcomed the announcement. "This is a very strategic investment from a number of angles. The bottom line is that it shows Ireland is still up there in terms of attracting high-quality manufacturing jobs."

He said the decision by Pfizer to go ahead with the project was significant for the State and the Irish pharmaceuticals industry in the message that it sent out to other companies in the sector about the viability of investment in Ireland.

IBEC's Irish Pharmaceutical and Chemical Manufacturers Association said the announcement from Pfizer was very encouraging. "It shows that this sector is still a priority for the Government, a development which is being augmented by the work of Science Foundation Ireland that is beginning to feed through," a spokesman said.

Pfizer has nine separate operations in Ireland, predominantly in Cork, currently employing around 2,000 people. It was one of the first pharmaceutical multinationals to site in the Republic 40 years ago.