A MERGER deal between two of the biggest names in the region's caravan sector will see the loss of 130 jobs in County Durham.

The announcement yesterday by the Explorer Group was followed by a further redundancy blow for the county with 57 jobs going at Chamberlains Coatings in Bishop Auckland.

The two caravan firms, Compass Caravans Ltd at Langley Park and Eldiss Caravans (Consett) Ltd, owned by the Explorer group, will both manufacture from a new plant at Delves Lane in Consett.

The move has been announced just months after Explorer unveiled its £4m investment programme at the new Delves Lane factory, with the expansion expected to bring more jobs for the group.

The group did not rule out increasing numbers in the future but MD at Explorer, Paddy Doherty, explained the bulk of the redundancies had been caused by "restructuring".

"In order to create a stronger business which is able to lead the market in years to come, we need to respond to market conditions," he said.

"We need to deliver efficiencies throughout our entire business process, and regrettably the company must lose some of its workforce."

In January the Explorer group said the move signified its commitment to the Derwentside area, and was part of a bid to modernise the manufacturing process and invest in new production technology

Mr Doherty added: "The bulk of the redundancies are the result of restructuring which has been part of our long term plan for our activities within the leisure market.

"It is a very competitive market and it is vital we are able to rise to the challenges ahead."

The Explorer Group owns five other leading brands - Coachman, Herald, Crown, Autohomes and Buccaneer - and makes 8,000 touring caravans and motor homes each year.

Meanwhile, bosses at Bishop Auckland coatings company, Chamberlain, have claimed falling demand for wallpaper was behind the firm moving to Lancashire.

The 57 workers at the firm, which makes vinyl coated wallpaper, have been told they will be given the chance to move factories before a 30-day redundancy consultation period.

The factory is part of the Speciality Coatings Group in Lancashire which also owns Darwen Coatings and Adhesives.

Its parent company is Chapelthorpe Plc, formerly Readicut International which acquired Chamberlain Coatings in January 1999 in a £13.25m takeover.

Mike Ferguson, managing director of Speciality Coatings Group said: "We're embarking on a consultation about the site closure and whether staff wish to move to our sites in Darwen, Lancashire.

"While this proposed closure is very regrettable, it is necessary to remain competitive and to respond to reduced demand brought about by the continuing strength of sterling and a fall in consumer demand."

A worker at the firm said: "I think the majority of people are very upset about it. A lot of people have put in long service with the company with some working more than 24 years.