THE region's chemical and pharmaceutical sector will grow by at least £4.5bn over the next ten years - creating 20,000 jobs, industry leaders have predicted.

The North East Process Industry Cluster (Nepic), which represents more than 300 companies in the sector, has put together a strategy which shows that investment earmarked for the region will boost its gross domestic product (GDP) by about 50 per cent, or £4.5bn.

And it has also identified up to £9bn of investment, which could come to the region.

The process industries currently make up a quarter - or £8.8bn - of the North-East's GDP.

It is forecast that the sector will grow to at least £13.3bn over the next five to ten years.

However, a shortage of skills could threaten the potentially massive investments, Nepic warned.

Nepic development manager Dr Ian Mains said: "The projection by the sector skills council is that 60,000 new jobs will be created across the UK in the process sector over the next ten years.

"As we make up about one third of the UK's process industry in the North-East, we predict that 20,000 will come here.

"This is something that is going to happen. The only big issue is if we cannot grow our own skills base at the rate of projected expansion. This is the major threat to the investment. We have seen concerns in recent days over the quality and take-up of science subjects in schools and this is something that needs to be tackled urgently."

Nepic argues in its report - Growth Strategy for the Process Industries in North-East England - that the £9bn increase in GDP could go a long way to closing the £29bn productivity gap between north and south.

Base chemicals alone has seen productivity grow from £1.3bn to £3.5bn between 2000 and last year.

The process industries sector as a whole employs 34,000 people in the region directly and an estimated 280,000 indirectly.

Dr Stan Higgins, chief executive of Nepic, said: "This influential piece of collaborative work, by the senior process industry leaders in the region, proposes a series of actions that will make the North-East even more attractive to global chemical, pharmaceutical and biotechnology companies in the future.

"They propose that a higher profile is needed for these sectors to ensure that our region remains in the forefront of the minds of those taking major investment decisions in these global industries and they believe that we are sometimes under-represented when such decisions are being made.

"While we are working on a portfolio of projects that could increase regional GDP by as much as £5 to £9bn, our industrialists believe that more focused resources from both industry and the public sector are needed to develop the infrastructure, skills base and tailored support packages that will ensure that these projects are captured in the region.

"The scale of the investments that these industries make, and the numbers of well-paid jobs involved have the potential to transform the economic fortunes of the whole of the North-East."

* On Wednesday, MP for Middlesbrough South and East Cleveland Ashok Kumar submitted an Early Day Motion before Parliament in support of the growth plans developed by senior industrialists and Nepic.

The motion, signed by other Teesside MPs, also calls on the Department of Trade and Industry and One NorthEast to ensure the industry receives the resources it needs to meet the ambitious targets set out in Nepic's strategy.