A privately-owned German company is investing £300,000 to set up a factory in Consett.

The subsidiary company will produce silicon rubber fabric for its range of specialist hoses and hopes to eventually create between 20 and 30 jobs.

Matzen Schlaugh-Technik Gmbh (MST Germany), based near Hamburg, develops and manufactures high specification hoses for blue-chip customers in the automotive, aerospace and railway industries.

The Derwentside Industrial Development Agency (DIDA) helped secure the inward investment as a result of putting together a grant package in excess of £60,000 with backing from the DTI, County Durham Development Company and Derwentside District Council.

Production at MST UK Ltd, on Consett's Park Road Industrial Estate, has begun with three employees. The company expects to have a workforce of 20 to 30 in the longer term.

Managing director Bill Lyons said: "We looked at other potential localities in the UK and Europe including Essex and Belgium, but DIDA's support and input along with the package they put together of suitable premises, financial backing and the quality of workforce available, made Derwentside our choice."

Steve Armstrong, Business Adviser for DIDA, said: "We are delighted to have been able to secure this inward investment for Derwentside."