JAPANESE electronics firm SMK is to continue production at its Newton Aycliffe operations, despite the plant losing more than £2m in the past year.

There will be some job losses, although the company is not yet saying how many will go.

The news follows the completion of a global review of operations, which has already seen the County Durham workforce cut from 350 in 2000 to 125 now.

However, the majority of those job losses have been among temporary staff.

As part of the restructuring, production of some products will be transferred to a sister plant in Hungary, with other new products being brought into County Durham.

Personnel director Les Dixon said: "Given the impact of an adverse business situation, an in-depth restructuring programme has been undertaken, which will result in the continuation of operations at Newton Aycliffe, but on a reduced scale.

"Some production will be moved to a new plant in Hungary, but it is still too early to say exactly what they will be. In return, some new products will be brought into Newton Aycliffe."

He said: "The workforce have all been consulted on the process, and while there will be job losses, nobody will go before June.

"We will have a better idea within the next few weeks on which products will be moving to the new plant and how that will affect the head count at Newton Aycliffe."

The Japanese business, which opened in 1988, manufactures remote control units for televisions, and control panels for photocopiers, but has seen a downturn in its global markets.

In October 2000, the company's managing director, Shigechika Yanagi, was made an honorary ambassador to Japan by County Durham Development Company, because of his work in doubling the workforce at the plant.

The job losses at SMK are the latest to hit Newton Aycliffe since the start of the year.

In February this year, Blenheim Furniture, which manufactures upholstered furniture, announced it was to close its plant in the town by the end of May.

The town is still recovering from the loss of 283 jobs in December when the Sanyo factory closed. That site is up for sale at a price of £2m.

In December, workers at the Flymo factory in the town were spared the axe, when parent company Electrolux announced plans to cut almost 3,000 jobs worldwide