A COMPANY specialising in electrically-powered vehicles is poised to win a multi-million pound contract from a major dairy.

Smiths Electric Vehicles (SEV) has entered final negotiations for a five-year contract to maintain and service Dairy Crest's fleet of 2,200 milk delivery vehicles - some milk floats, some diesel-powered Transit-type vans - in the South.

The deal, which is believed to be worth about £6m a year to SEV, would see 78 staff transfer from Dairy Crest to SEV, effectively doubling the size of its fleet maintenance operation.

Consultation with the affected staff is under way.

SEV is part of the Tanfield Group, which is based in Stanley, County Durham, and employs more than 300 people there.

The contract would be an extension of SEV's contract to service 500 vehicles in the Dairy Crest vehicle fleet in East Anglia.

Tanfield chief executive Roy Stanley said: "This is a ringing endorsement of our business model for SEV fleet maintenance.

"The improved Dairy Crest contract would not only see the division double in size, but vastly improves our strategic position in a highly-competitive market."

Dairy Crest's dairy division delivers milk to more than a million households in the UK.

Stephen Fisher, SEV's managing director, said: "We have built up a strong relationship with Dairy Crest over 40 years of trading and have an excellent track record from maintaining their fleet in East Anglia during the past ten years.

"This means they trust us to meet their need for rapid response and high maintenance standards within a fixed budget."

The Tanfield Group also believes that an extension of the Dairy Crest contract should create a strong sales opportunity for Faraday, its next- generation electric delivery van.

Faraday is a Transit-type van with a restricted top speed of 40mph and enough battery power to travel 80 miles a day.