AMERICAN Power Conversions (APC) has confirmed that it will proceed with plans to build a new plant in Castlebar, Co Mayo. However, plans for projects at Gillogue, Co Clare, and Drogheda, Co Louth have been abandoned.

A spokeswoman for Mr Ed Machala, the vice president (manufacturing) of APC, said the group had agreed on preliminary terms and was "close to tying up the deal" for the Castlebar project.

The spokewoman said the plant would create 250-300 jobs and it was hoped to open the factory in the second quarter of 1997. Mr Machala was unavailable last night but is due in Galway, where APC has a plant, at the weekend. This project is one year ahead of schedule and is employing 600 people.

It is understood that negotiations between APC and IDA Ireland have been taking place for several weeks. One year ago, APC announced a £40 million investment plan for three new plants in Ireland, creating 1,000 jobs.

However, the restructuring operation means that APC will employ close to 900 people, considerably below initial expectations. The Government and the IDA appear not to have given up hope that APC will expand further.

Any new deal, however, will be the subject of new negotiations over the coming weeks, as the Drogheda plant, for example, has been bought by DSC Communications Corporation. No suitable plant currently exists in Drogheda for a project along the lines of APC's original plan.

Problems about APC's plans became apparent earlier this year. APC expressed reservations about the Gillogue plant and the site on environmental grounds.

Lawyers for international firms are increasingly reluctant to allow clients to take over plants which could entail them becoming liable for environmental damage.

A further complication was that the investment was a single deal for three plants.

One industry source suggested last night that APC management may have been focusing more on the middle and far eastern markets where demand for APC's products had increased greatly in the past year.