Denim apparel maker Federal Jeans Inc is set to invest $20.5 million in new manufacturing and warehouse distribution centres in New York City, New York Daily News has reported.

The Brooklyn-based company said the facilities, to be completed by 2006, would create about 200 local jobs.

The company is already scheduled to develop a 156,000-square foot site in Throgs Neck, The Bronx, and is working with the city to acquire a 270,00-square-foot plot in Far Rockaway, Queens.

According to president Yoram Moussaieff, Federal Jeans decided to stay in New York after being approached to develop facilities in Virginia and Louisiana.

"We found it to be too costly to be far way from where the action is," Moussaieff said in reference to the city's fashion industry status.

The expansion will create an additional 150 jobs during its construction phase, he added.