A READY meals manufacturer last night confirmed it was making 320 staff redundant in the region - despite investing millions of pounds at one of its North-East sites.

Kerry Foods, which saved hundreds of jobs when it bought Hibernia Foods' ready meals business, in Hartlepool, out of receivership two years ago, said the lack of demand had forced it to make most of the staff redundant.

Ireland-based Kerry Foods, which employs 9,000 people across 25 plants in the UK, said it had expected huge demand in the ready meals sector, and spent millions upgrading its Hartlepool factory.

But, partly because people were eating more healthily, the annual growth of 12.5 per cent in the ready meals sector slumped to zero last year.

Frank Hayes, corporate affairs manager at Kerry Foods, said: "We have invested considerable resources in establishing a state-of-the-art ready meals production facility in Hartlepool.

"The ready meals market has been growing at significant rates in recent years and was planned to grow in the future, but market growth was slower than anticipated and the new business we expected just didn't materialise.

"Regrettably, we have no option but to scale back production. We will continue to have about 30 staff on site making long-life meals, and see if the market picks up. If it does, we may be able to scale production back up again."

He said the company hoped to move as many staff as possible to its factories in Durham, Sunderland and York.

Alan Milne, of the Bakers, Food and Allied Workers Union, said: "We will be doing everything we can to preserve as many jobs as possible.

"We believe there will be about 50 redeployed to Durham, but we're not sure yet about the other factories.

"This has come as a complete shock to many of the staff at Hartlepool. A lot of them have long service there, and the company acknowledged that they are a loyal and committed workforce.

"The company has invested millions in the factory."

Kerry Foods makes own-label ready meals for supermarkets at the site.