GrowHow UK has announced today (October 9) it is closing its Severnside fertiliser plant.

The business, which was formed recently as a 50/50 joint venture between Kemira GrowHow Oyj and Terra said the plant was not cost effective.

Production is expected to stop by the end of January 2008, affecting 127 jobs.

GrowHow’s Chief executive Paul Thompson, said: “It is regrettable that closure is necessary, as we employ many skilled and dedicated people at the facility.

“However, the facility is too small to compete effectively without immediate significant investment.

“In targeting the company’s financial resources towards our more efficient production facilities, we believe we will strengthen our business and improve our product and service offering to our customers.”

Closure of the facility is expected to cost in the region of £13 million, including redundancy and pension payments.