A DAIRY firm that recently closed one of its processing plants in the region yesterday said it was trading in line with expectations.

Arla Foods has ended production at its site in Benton, Newcastle, more than a year after announcing its intention to close the factory, with the loss of 147 jobs.

The plant, on the Bellway Industrial Estate, still has a skeleton staff on site to deal with the removal of equipment, but the production of fresh and flavoured milk and creams ended in January.

Arla announced in October 2004 that it intended to close its Benton site together with an Arla dairy in Ruislip, west London, creating 400 redundancies.

The North-East site was earmarked for closure in May last year, but production was extended because of a delay at its new plant in Lockerbie, Scotland.

A company spokesperson said: "Arla won some business and because the plant in Lockerbie was not ready we decided to process that volume in Newcastle.

"It was not a U-turn in the decision to close the plant, it was just a delay."

Its decision to close the plant followed a review of operational efficiencies and was part of a restructuring by the group, which was formed in 2003 in a merger between Express Dairies and Arla UK.

In an update yesterday Arla, which has a dairy processing plant in Northallerton, North Yorkshire, said it was trading in line with expectations.

The group said it had seen its Lurpak butter brand claim a record 19 per cent market share, while sales of Lurpak and Anchor butter have increased six per cent year-on-year.