A MAJOR £1.7m investment has been announced at FeedCo's animal feed manufacturing plant at Piercebridge.

The work, spread over two years, involves a complete re-modelling of the mill and total refurbishment, which will increase throughput and double production capacity.

It is a huge sign of confidence in the future and will see the entire plant match the audit requirements of all assurance schemes.

The company, which is jointly owned by Farmway and Lloyds Animal Feeds, was formed only 15 months ago. It produces a complete range of animal feeds and has exceeded all of its initial expectations, leading to the huge investment.

On Wednesday Mark Meynell, managing director, said both partners were excited by the decision.

"We have exceeded our most optimistic forecasts," said Mr Meynell. "We have already invested significantly in our distribution fleet and introduced a new IT system."

The initial response of customers had been very encouraging and, following a comprehensive review of the manufacturing process during the summer, it was decided to begin the work without delay.

"It is very important in the current marketplace that we are able to meet our customers' demands effectively and in a cost effective way," said Mr Meynell. "This investment will ensure we continue to do so and, with the ever-increasing demands on quality and traceability, we will be able to meet all the stringent demands of the food chain."

One North-East has backed the investment with a processing and machinery grant under the rural development programme.

Peter Hull, chairman of FeedCo and chief executive of Farmway, said the joint venture agreement with Lloyds had proved very successful.

"The investment highlights the strength of the new company and the need for a viable feed mill in the area," he said.

The benefits of rationalising the running costs, improving quality and achieving the appropriate accreditation had enabled both partners to strengthen their position within the marketplace.

"We are the first step in the food chain and we must have the accreditation which gives the end users the confidence in the food they eat," said Mr Hull.

"Both companies have a proud history and, as a result of this investment, an exciting future. We are delighted that the hard work of all the staff over the past 15 months has been worthwhile.

"We have a dedicated and knowledgeable workforce and, in an area where manufacturing jobs are being lost, we are delighted that One North-East has been able to help us achieve our plans."

The building programme has begun and will be spread over 24 months to ensure production is not disrupted.

Eric Watson, consultant engineer, said a great deal of planning had been necessary to produce a timetable which would be met and which would ensure continuity of supply.