THE Sanyo site in Newton Aycliffe, County Durham, will be returned to its former manufacturing glory with the creation of 120 jobs.

The news is a significant boost to a sector of industry left reeling earlier this week by British American Tobacco's shock decision to axe 500 jobs with the closure of its Darlington plant.

Sanyo's nine-acre plot was bought by the Balmer Lindley Group, which expects to be on-site next month and plans to start production soon after that.

The plant has lain dormant since summer 2001 when Sanyo announced 284 staff were to go with the closure of the factory, which made microwave ovens.

A sister operation in Thornaby, near Stockton, which made magnetron components for the ovens, also closed, with the loss of a further 31 jobs.

Balmer Lindley's main business is making galvanized steel safety barriers for motorways. It will use the County Durham site to produce streetlighting.

The group also has a factory in Sunderland, manufacturing steel tubes for power stations.

Arthur Hartshorne, the company's property director, praised the efforts of the County Durham Development Company and other organisations which helped to make the sale possible.

He said: "If the North-East does not succeed in terms of manufacturing jobs it will not be for lack of trying. Everybody we came into contact with has been absolutely fantastic, first class.

"This is a good site, very accessible in terms of the A1 links and it suits our process."

The company, from Scunthorpe, Lincolnshire, secured a regional selective assistance grant. Chartered surveyors, Lamb and Edge, in Newcastle, worked with County Durham Development Company to sell the site.

Phil Eadon, director of marketing at the development corporation, said: "It is great news that we have been able to identify and secure a new manufacturing company to take occupation of the former Sanyo factory.

"Their investment in a new factory to make a new range of products will be greatly valued by the local community."