Seagate is closing one of two manufacturing plants in Northern Ireland, axing 768 permanent and 159 temporary employees.

The 10-year-old plant at Limavady in County Londonderry manufactures nickel plated aluminum substrates — the base platter on which magnetic materials are deposited for making hard drives.

"We have made great efforts over the past few years to maintain the competitiveness of the Limavady facility, but recent increases in global substrate industry capacity together with our competitors' lower labour costs are also contributing factors," said William O'Kane, plant manager at the Limavady factory. "We have examined several options to maintain some or all of the Limavady facility but none proved financially viable."

Staff was informed of the decision today, said Seagate spokesperson Woody Monroy. The closure is expected to take place in the second half of next year.

A second Seagate plant nearby at Springton in Londonderry will be unaffected, said the company. The facility, which fabricates wafers, employs 1,381 workers.

Next year, the company plans to open a substrate facility in Malaysia. The new plant will be Seagate's third manufacturing operation in the country, and will reportedly create 2,500 new jobs when the plant is fully operational.

In Seagate's most recent quarterly results, the company reported a net income of $355m, leaping from $19m in the same period last year. Revenue was up 17.6 per cent to $3.3bn. The company expects the favorable conditions to continue into the current quarter ending December, predicting revenues of $3.4bn to $3.5bn. ®