A TANK-track manufacturer, forced to make redundancies when the recession hit construction, is set to shed more jobs following cuts in the UK defence budget.

County Durham engineering firm Astrum, Weardale's biggest employer with more than 260 staff, yesterday said it was facing up to 25 potential redundancies, as well as possible short-time working, as it looked to reduce its cost base.

The Stanhope, company, which makes the metal tracks tanks and earthmoving machinery run on, said its UK business had been hit by October's Strategic Defence and Security Review.

The review will see an 8per cent cut in Ministry of Defence (MoD) spending over four years.

Astrum said it hoped to achieve the cuts through voluntary means and unions said they would work with the firm to keep job losses to as minimum.

In 2009 Astrum made around 30 redundancies after its commercial sector business, based upon earthmoving and transportation vehicles for construction and mining, was heavily affected by the downturn.

But the firm's fortunes appeared to be improving when it took on 15 staff after securing a two-year extension to an MoD contract in February last year to supply the metal tracks for vehicles, including the Challenger 2 tank, worth £30m and with the option of a further two years.

Last night managing director Phil Kite said: "The public spending review and resultant Strategic Defence and Security Review have meant

demand from the MoD has reduced and this combined with our range of defence products providing excellent durability and value has meant we have seen less UK business."

Ironically the business has enjoyed a growth in exports, which increased from 23per cent to 33per cent of turnover in the last twelve months, and total revenue rose by 10per cent to more than £30m.

Mr Kite said: "Our strategy is to develop a sustainable export business and in this regard we have been successful

"However demand from our UK market for 2011 has fallen and we must ensure we remain competitive.

"We are pleased with how our commercial business has recovered from the recession and we will continue to invest in our export driven strategy which has proved to be successful.

"At the same time we need to restructure our business based upon maintaining our competitiveness and the right mix of skills.

"We regret the impact that this will have on our employees and we are working with them and our trade unions to mitigate these proposed job losses."

Jimmy Skivington, regional organiser with the GMB, which represents some of the site's workers, said: "We will be seeking a meeting with the company as soon as possible to look at alternatives to redundancies."