Dairy company Arla has announced plans to close a North Yorkshire factory with the loss of 130 staff – but says it’s hoping to create 100 new jobs in Leeds with a planned £70 million (€77.4m) investment in additional production facilities at its flagship dairy in Stourton.

The Scandanavian-owned company, whose products include Lurpak and Anchor butter, and Cravendale milk, intends to transfer cream production to Stourton from its creamery in Northallerton, North Yorkshire.

Employees at Northallerton have been told the company proposes to close the creamery, subject to consultation, during 2010, resulting in the loss of around 130 jobs.

“While the investment at Stourton is a positive step for the business, it is with much regret that we have announced the proposed closure of a site which has been strategically important to us,” says Lars Dalsgaard, Arla UK’s business group director for supply chain.

“We are immediately entering into consultation with colleagues at Northallerton, and their representatives, and are committed to giving full support to those colleagues who are affected to help them find alternative employment both internally and externally, subject to the consultation process.”

The company went on to say that the investment at Stourton would allow the firm to expand production to process a range of dairy products, including fresh cream and creme fraiche.

Building work has already begun at the site and the new facilities are due to be operational early next year.