A CHEMICAL factory which looks set to close with the loss of 100 jobs was due to undergo a £2.25m upgrade, it has emerged. Great Lakes Chemical Corporation announced this week that it is proposing to close its plant in Newton Aycliffe, County Durham.

But earlier this year it had planned to spend millions of pounds on new equipment to make it more competitive.

Newton Aycliffe site manager Marc Jordens said the company had applied for a substantial grant towards the capital project from Regional Development Agency One NorthEast.

He said: "About six to nine months ago we were proposing an upgrade on the site to bring the facility more in line with our other plants in the States and that was what the grant was to support.

"That's clearly changed now and a number of factors have led us to decide we will take these new steps."

Mr Jordens said changing conditions in the over-supplied speciality chemicals markets and pressure from European competitors had forced a change of heart.

It is now proposed to transfer production to a plant in the United States, which has an excess capacity.

A spokesman for One NorthEast stressed that no grant had been awarded to the company.

He added: "We have spoken to the management of the company today and have offered to work with them to help them in any way we can at this critical time for the plant's future."

Derek Cattell of the GMB union, who until recently represented members at the plant, said the announcement had come as a complete shock.

He said: "At the time the announcement was made we had still not concluded this year's pay settlement.

"Part of the discussions were about productivity increases, so we were hopeful that the new plant would generate some rewards for the workforce.

"I know there's been difficulties with the market and with over-supply, but it's still quite a shock because we've never had any redundancies there."

Mr Jordens gave assurances that if the plant does close it would be properly decontaminated, given the toxic nature of the materials it deals with.

He said: "If the site is sold, clearly we would negotiate with the buyer on what decontamination needs to take place.

"It the site is not sold we would be in contact with the Environment Agency to make sure that we do whatever they require."