CHEMICAL company Elementis Chromium announced yesterday it is to reduce its Teesside workforce by more than half.

About 120 staff at Elementis, in Eaglescliffe, near Yarm, will lose their jobs as the multi-national looks to reduce costs after being affected by rising raw material and energy prices.

The group said it was undertaking a strategic review and had decided to "reduce the volatility of chromium earnings and refocus on specialties", the largest and most profitable part of its business.

The workforce of 230 at Eaglescliffe will be more than halved by spring.

In a statement yesterday, the company said: "The decision has been a very difficult one, however the company believes it is essential to secure the long-term future of the site by providing a more stable and sustainable earnings base."

Elementis' UK business has been in the red for the past two-and-a-half years. The group blamed soaring energy costs for the continued losses. It made 25 redundancies at its Eaglescliffe site last year.

The company's technical director, David Raw, said: "We recognise that this is a very difficult day for our employees, but we must look to protect the future of the Eaglescliffe site. We firmly believe that the measures announced will deliver the necessary sustainable earnings environment."

Bob Bolam, of the Amicus union, which represents some of the Eaglescliffe workforce, said: "This news has come as a shock and ourselves and the T&G will be meeting staff representatives on Wednesday."

Yesterday's announcement followed a public statement by the Elementis group about the future strategic direction of its businesses.

The company said it would also be making job cuts at its head office, with most corporate functions being absorbed into the businesses.

Executive chairman Edward Bramson said: "We anticipate that this will leave us with a more profitable and less volatile business going forward."

The North East Process Industry Cluster (Nepic) called for the Government to take action on soaring energy costs before more companies were affected.

Nepic business development manager Ian Mains said: "There is great concern over rising energy prices and companies face the risk that they may have to shut their plant down.

"Action needs to be taken now to tackle the volatility of energy prices because it is putting pressure on our companies."