The opening of a new custom-built decorative paints facility will result in the closure of Akzo's Prudhoe and Slough sites, as the firm moves all manufacturing operations to the new location in the North East.
The planned new facility is within 25 miles of Akzo's existing site in Prudhoe and it is hoped the state-of-the-art plant will be fully operational by the end of 2014. The move, which will see Akzo close the Prudhoe plant, as well as its manufacturing operations in Slough, is designed to "reduce working capital", says the firm.
Akzo has now entered into a period of consultation with the 220 staff employed across the two sites but says there will be opportunities at the new facility.
Akzo Nobel decorative paints managing director Richard Stuckes said: "Before making any financial decision on the proposal, we will now enter into a period of consultation with our employees. If the project goes ahead, there would be relocation possibilities for those with the desired skill-set who wish to transfer to the new site."
The intention is for Slough to remain as the headquarters for the UK decorative paints business and for global research and development, as well as for Akzo's marketing team.
Mr Stuckes added: "This is part of a wide-ranging European strategy designed to strengthen our leadership positions and accelerate sustainable growth. A new facility of this size and sophistication will enable us to be more agile and competitive, while dramatically reducing our impact on the environment, due to lower energy consumption and waste.
Akzo recorded an 8% sales rise in Europe for the first quarter ended March 31, 2011. The Dutch paints firm also upped its advertising spend by 17% for the period, helping grow market share in the UK. However, in a recent trading statement, the company said it has seen a "continued softness of demand" in its mature markets, including the UK. As a result it expects a Q2 EBITDA of around €550m.