Dairy company Dale Farm has announced the closure of its east Belfast plant with the loss of 96 jobs.

Mr Neville Cruikshanks, managing director, said that, while the ice-cream brand remained number one in Northern Ireland, the capital investment required to compete in a modern marketplace with ever-changing products was beyond the reach of a relatively small manufacturing plant.

"This has been a very difficult decision and was only taken after exhaustive studies into the feasibility of further major investment in new plant and equipment," said Mr Cruikshanks.

"Competing in the mainstream icecream market, with international manufacturers producing high volumes of single products in dedicated plants with the resultant economies of scale, has just proved impossible."

In spite of contracts arising from the production of own-label product for some major supermarkets, he said the company had been unable to secure a level of business that would sustain the manufacturing operation, and had lost money in three consecutive years. "The proposed closure is no reflection on the workforce," Mr Cruikshanks said. "The announcement will have come as a shock, but not a surprise, to them."

Dale Farm, which employs 275 people throughout Northern Ireland, will hold discussions with trade union representatives about enhanced redundancy terms. It will be putting in place a full support package of counselling and outplacement services to help those seeking alternative employment.

"There is a good possibility of a management buyout of the sales operation," Mr Cruikshanks said.

"We have every reason to believe that this will allow some jobs connected with sales and marketing to be saved, and will ensure that the Dale Farm ice-cream brand will not disappear entirely from the freezer cabinets."