A COMPANY specialising in electric vehicles has strengthened its service contract with a major UK dairy.

Smiths Electric Vehicles (SEV), a subsidiary of The Tanfield Group, based in Stanley, County Durham, is taking on a service maintenance contract for another 400 Dairy Crest vehicles.

Last year, SEV won 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 contract was believed to be worth about £6m a year to SEV. Yesterday's deal is expected to increase that figure by £750,000.

Roy Stanley, Tanfield chief executive and chairman, said: "This contract not only builds on our strong relationship with Dairy Crest, but also significantly enhances our provision of a UK-wide service support network for our electric vehicle customers."

The 400 vehicles came into Dairy Crest's ownership with its recent acquisition of doorstep delivery business Express Foodservice.

About 60 vehicles are based in central London, with another 340 in the Midlands. A total of 19 Dairy Crest employees - of whom 18 are mobile service engineers - will become SEV employees.

Stephen Fisher, SEV managing director, said: "The addition of these areas to the contract was the final piece in the jigsaw for our depot network.

"We now have the right number of depots and sufficient high-quality staff to offer mobile engineer coverage throughout England and Wales."

SEV took on 78 staff from Dairy Crest under the last contract. It now has more than 120 mobile service engineers at eight depots.

Last month, Tanfield announced its largest acquisition to date - paying £7.3m for the powered access division of Irish manufacturer UpRight International.

The announcement came as the Aim-listed group reported profits of £2m for the year to December 31, compared with a loss of £5.8m in 2004.