CHEMICALS company Elementis said it was satisfied with first-quarter trading and was on course to reduce capacity in its chromium division by Friday.

The company, which has been carrying out a strategic review of its operations in an effort to increase earnings and focus on its specialties business, is closing one of the kilns at its Teesside plant, with the loss of 114 jobs.

David Raw, technical director of Elementis Chromium, in Eaglescliffe, near Yarm, said: "We are on course to make the changes announced in October effective from March 31. People will be leaving that day and the business will be under a new structure."

Elementis, which is the world's biggest producer of chromium chemicals used in coatings, leather tanning and metal production, said it expected a reduction in fixed costs of £11.1m this year and a further £1.9m in next year.

Elementis said it had also acted to stabilise 2006 earnings by fixing 40 per cent of its electricity costs and 60 per cent of its gas costs for the year.