A VALLEYS' transformer factory was yesterday facing closure and the loss of up to 200 skilled jobs.

FKI Transformers has announced it is proposing to close its distribution transformer operation, South Wales Transformers (SWT) Switchgear, in Newport Road in Pontllanfraith, near Blackwood.

The threatened closure does not affect the 150 people employed in the Switchgear factory.

The company is blaming competition from countries in Eastern Europe and the Far East for a downturn in business.

A 90-day consultation period will now take place between the company and the union with a view to closing down operations in Pontllanfraith. A spokes-man for FKI Transformers said: "The proposed consolidation at Loughborough will substantially reduce the fixed cost base of FKI Transformers and consequently put it in a better position to compete in both domestic and export markets going forward."

John Jameson, 28, is a Pontllanfraith father-of-two working at the factory. He said: "They told us yesterday morning and they just said they're moving everything to Loughborough, and there's a possibility that all of us will lose our jobs.

"We'd heard rumours in the past but there was nothing solid until yesterday.

"I've been here for nine years. I started straight from college on the apprentice scheme, so I've not had another job.

"I'm obviously gutted - we're going to lose our jobs and with a young family, I can't really consider moving."

Pontllanfraith councillor Malcolm Evans said: "This has always been a family firm and a Welsh company so it is sad and disappointing that it is going."

Councillor Rob Gough, Caerphilly cabinet member for economic development, said: "We lost 4,000 jobs in 2001 and 2002 but I thought we'd ridden the storm.

"I just hope this isn't the start of it again." Islwyn AM Irene James said: "This is very sad news. "I have contacted the economic development minister's office to ask that everything possible can be done to assist the affected workers."

Islwyn MP and under secretary for Wales Don Touhig said: "I have tremendous sympathy for the workers and their families who have received this news today."

A spokesman for workers union Amicus said: "We are shocked by this statement which was completely and totally unexpected."