AN investment of £4.4m in steel facilities on Teesside, which will cost 98 jobs, is necessary to keep the business competitive, management claimed last night.

Steelmaker Corus announced yesterday it was shedding the jobs over the next 21 months as it modernises its beam mill in Teesside, which makes 700,000 tonnes of beams and columns for buildings every year.

The modernisation, which comes as part of the company's Restoring Success programme, could help secure the long-term future of steelwork in Teesside.

But details of the job cuts emerged only days after Corus rewarded its chief executive with a 19 per cent pay rise to £1.43m last year.

Corus said yesterday the investment would improve operational efficiency and customer service.

Andrew Page, managing director of Corus Construction and Industrial, told The Northern Echo: "We have a very good facility in the mill and this really is an investment for the future.

"The company wants to ensure it has lead positions in its product areas, certainly in Western Europe, and that sometimes needs significant investments.

"This will help keep us competitive."

He hinted that more investment was in the pipeline at Corus.

"We are an industry that needs to keep investing, otherwise we just drift. When we can get the finance we make the investment," he said.

At the beam mill, money will be directed towards installing machines to carry out processes such as product testing and the straightening of beams which are currently done by hand.

Corus will also combine a string of manufacturing activities and improve facilities for the loading products, such as putting in a new automated crane.

Corus said consultations have already begun with staff and trade unions, and it emerged yesterday that about 40 staff had volunteered for redundancy.

Corus - formed from the merger of British Steel and Dutch firm Hoogoevens in 1999 - returned to the black last year after benefiting from rising steel prices and the benefits of a major restructuring.

The Restoring Success modernisation programme recently involved plans to invest £130m at one of its biggest steelmaking plants at Scunthorpe, where it will make structural sections, rail and wire rods.

Its beam mill on Teesside is part of Corus's Construction and Industrial business, which employs 517 workers at the plant and a further 700 staff locally in engineering and support functions.

Corus also operates a separate cast products business on Teesside which exports slabs and employs 1,700 staff.

Teesside Cast Products (TCP) will continue to supply the beam mill, as well as a consortium of global steel companies which it reached an agreement with in January.

From next year, TCP will supply the consortium with steel slab, which will keep steelmaking on Teesside for at least ten more years.