A CHEMICALS company said yesterday that speculation its factory in the region could close with the loss of 230 jobs was unfounded.

Fears that work could move overseas has risen among employees of Elementis Chromium after the multi-national announced plans to shed 120 jobs at its Eaglescliffe site, near Stockton, Teesside.

Unions yesterday said finance company Hanover, which owns 15 per cent of Elementis, forced the cuts.

"Hanover is looking to impress the City, but that's being paid for by our members' jobs," said Joe Keith, senior regional industrial organiser of the Transport and General Workers Union.

"The Eaglescliffe plant produces a unique product which has won Queen's Awards for technology. It is not credible, in our view, that a quality product recognised the world over is suffering.

"Our concern is that this venture capital company is more interested in pleasing shareholders than looking at the long-term economic situation, particularly if the plant was shut down completely."

Last Monday, Elementis said the reduction in staff was part of a restructuring programme to make the Eaglescliffe plant profitable after it had operated at a loss for two-and-a-half years.

The company also admitted that it had been affected by rising raw material and energy costs.

A 90-day consultation period is under way. Workers have yet to learn which jobs will go.

Union leaders have written to local MPs and MEPs and said they will campaign to keep work in Eaglescliffe.

Bob Bolam, Amicus regional officer, said: "It is going to be a black Christmas for all the 230 workers because they don't know who is going to be affected by the redundancies."

Speculation is rife that there will be more job cuts in the future, with talk of the plant shutting down altogether and work transferring to the US.

However, technical director of Elementis, David Raw, said there was no truth in the claims.

"The board has put in place a review strategy and taken the step forward to reduce capacity. If there was no future for the site, then Elementis would have made a full announcement last week," he said.

Elementis Chromium is the world's largest producer of chromium chemicals, with several plants in the US.