Arla Foods UK has said trading in the last six months has been in line with expectations and market forecasts, but added it would cut at least 310 jobs this year.

The company was created last year through the merger of the UK unit of Danish-Swedish cooperative Arla and the UK's Express Dairies.

Arla Food UK said its Lurpak and Cravendale brands have continued to perform extremely well and a further investment of up to £20m (US$36.9m) would be made at the new Stourton dairy to meet the increasing demand for Cravendale Purfiltre. The new dairy at Stourton, near Leeds, is on track to open in October 2004 and will replace the old Leeds dairy, which is to close once the new facility opens.

The company said the trading outlook for the six months to September 2004 remains competitive with anticipated supermarket milk volume reductions within its range of expectation.

Arla Foods also announced its intention to rationalise its production facilities and central functions across the UK for 2004. The company plans to close its dairy at Bamber Bridge in Lancashire and its glass bottling line at the Hatfield Peverel dairy in Essex, resulting in the loss of some 310 jobs.

The Hatfield glass bottling line closure is due to take place in May 2004, while the Bamber Bridge site closure is planned for July 2004.

The outcome of a further review of the company's production and distribution facilities for 2005 will be announced in October of this year.

"In addition, a full review of central functions following the recent combination of head office locations will result in a number of job losses in addition to changes already made," the company said.