ENGINEERING company The Tanfield Group last night revealed it is investing £15m in building a factory in the US, with a second planned for 2009, as it pushes ahead with its North American expansion.

The Tyne and Wear group is to build a factory for its Smith Electric Vehicles division - believed to be in California - as it makes inroads into the continent.

Last night, Tanfield, of Washington, Wearside, said the factory would produce about 1,000 US-specific versions of Smith's zero-emission Newton and Edison models each year when it becomes fully operational next year, and a second plant was planned for 2009 to raise production to 5,000 models annually.

Smith - which has struck numerous trial deals in Europe that could translate into multi-million pound supply contracts - is already attracting about 25 inquiries a week from large US fleet operators.

The company said it was keen to act quickly to take advantage of the levels of interest.

A spokesman said: "We intend to capitalise on this enormous latent interest by establishing an initial facility that can build in excess of 1,000 vehicles per year, followed by a purpose-built facility for 2009 with installed capacity of up to 5,000 units per annum for North America.

"We are confident that this will replicate the success enjoyed by our new technology electric vehicles in Europe."

The group revealed its intentions earlier this year to invest millions of pounds in its US operation, in an attempt to gain a major share of the continent's $4bn electric vehicle market.

Last month, Tanfield became the third largest manufacturer of powered access vehicles in the world with its £50m acquisition of US aerial platform maker Snorkel.

Tanfield's UpRight Powered Access division already operates from a factory in Fresno, California, and is an established name in the sector. The factory is currently taking orders of more than $1m a week, and Tanfield maintains it is confident that UpRight can regain the ten per cent stake it held in the US market before it plunged into administration in 2001 after the construction industry crash.

In the UK and Europe, Tanfield has been growing consistently, with booming orders in the Smith and UpRight divisions. The firm revealed an 82.6 per cent rise in annual turnover to £40.9m last year, and a 75 per cent surge in profit to £3.5m.

The company, which is listed on the Alternative Investment Market, revealed earlier this year that UpRight already has a worldwide forward order book of more than £35m this year, and its global network of distributors increased from 15 to 150 in six months.

Smith has also scored a series of potentially lucrative deals, with four initial orders for its Edison model set to lead to £40m permanent contracts, and trials of its Newton vehicle by TNT that could lead to an order worth at least £24m.

* Powered access rental company Hi-Reach Access yesterday said it has ordered more than 100 UpRight machines for its new base in the North-East. The vehicles will form the nucleus of its planned 200-strong fleet at the depot in Shildon, County Durham.