Home appliance group Glen Dimplex is to make its Co Louth headquarters into a global centre for research into renewable energy products.

The firm is to open a €2.5 million global energy centre at its Dunleer site this year. Employing 20 leading researchers and engineers, the centre will be dedicated to the research and development of energy-efficient products such as heat pumps, solar heating, wood pellet boilers and heat recovery systems for the group's Irish and global markets.

"The development of the Glen Dimplex energy centre here in Dunleer underlines our commitment to the environment, but also to placing energy efficiency at the very core of a group which has grown by on average 20 per cent per annum since it was founded," said founder and chairman Martin Naughton.

He said the new centre confirmed the company's commitment to manufacturing in Ireland where it has plants in counties Louth, Armagh and Down. But he said that manufacturing would only survive here through innovating and adapting to new markets.

"If we don't change we won't be here, and if we don't remain competitive we won't be here. We've been manufacturing in this village for more than 70 years and we survived by constantly changing, constantly designing, inventing and engineering products for the global market.

"I would say that only about 10 per cent of the products we make today we made 10 years ago because you have to keep adapting and changing," he said.

The company is in the third year of its corporate strategy for creating a new business through the development of energy-efficient products using renewable technologies. Glen Dimplex is now the largest producer of heat pumps in Europe, turning out 30,000 last year.

"It is the fastest growing part of our business by a long way. Three years ago we were selling €10 million worth of these products. Last year it was €150 million," said Mr Naughton.

The new global energy centre will form a central part of its new renewable energy strategy. "As a company we are investing more in R&D. If we can become a leader in renewable and sustainable technology, the world will beat a path to our door," he said.

He warned against increasing costs in Ireland, singling out the recent rise in the minimum wage. "Ireland has now the second highest minimum wage in Europe after Luxembourg. Luxembourg is in the centre of Europe. We're on the periphery. It is more expensive in terms of getting raw materials in and finished products out, so that has to ring a little alarm bell for us. We have to realise the basic economics that if we don't compete, we die," he said.

Despite huge expansion since it was set up in 1973, the company will stay in the Naughton family ownership, he said. "That would be the plan," he said. "It is a family business and will remain like that for as long as we think is necessary to keep it like that."

Mr Naughton became 100 per cent shareholder in the company when he paid an estimated €200 million for the 26 per cent held by Lochlann Quinn in 2004.

"We have had no requirement to go to the market because we are a profitable company," said Mr Naughton. The company has sales of €2 billion, but he remains tightlipped on profits.

"One of the little blessings of having a private company is that we can have our little failures in private, and our little successes in private," he said.