Porto, Portugal— Swedish furniture giant Ikea plans to invest 32 million euros to build a factory in Portugal aimed mostly at the export market.

Located in Ponte de Lima, about 250 miles north of Lisbon, the facility will create some 220 jobs and export about 90% of its production to Ikea stores in the Iberian Peninsula and Mediterranean basin.

Ikea chose the plant's site based on its proximity to an Atlantic port and the presence in the area of several furniture producers, who will be eligible for subcontracting work.

Ikea opened its first store in Lisbon in June 2004, and it has exceeded the retailer's sales projections. It plans to open a second store near Porto in 2007.