A SOUTH Bank industrial giant is to halt production as the recession bites deeper into North East Lincolnshire.

Hundreds of employees at Millennium Inorganic Chemicals, the Stallingborough pigment producer, could be told to stay at home on reduced salaries as parent company Cristal Global looks to ride-out the drop in demand during the economic downturn.

It comes exactly a month after rival Huntsman Tioxide announced plans to close the symbolic Grimsby plant, with the loss of 200 jobs, as the bottom drops out of the market for many construction-related products.

But there is some good news, as 25 jobs were created with a new fish processing plant coming to town, underlining the growth in demand for seafood – full details on page two.

Cristal Global, the Middle East based owner of Millennium, has announced a package of short-term measures that will be taken to reduce costs and manage liquidity within the business during the recession.

The company said production will be curtailed at the beginning of April, and the duration of it will depend on the market conditions. Pensions and benefit packages are also being reviewed.

A total of 360 of the 400-strong workforce will be affected by the curtailment, and employees, together with union Unite are being consulted over the management of the production halt.

The Telegraph understands from briefings to staff that the firm declined to comment on, that it has been operating at minimum output levels since December, but has still built up a surplus of stock after European demand slipped 35 per cent year on year. The production halt will initially be used to maintain plant equipment, with staff encouraged to take holidays in the down time and training opportunities looked at. Contractual salaries could then be reduced by up to 20 per cent as working hours fall. Contractor usage may also be revaluated.

It is believed a planned salary review for April could also be deferred for six months.

Bought out from American firm Lyondell two years ago in a £612-million deal, the transaction created the second largest titanium dioxide producer in the world.

At the time there was talk of expansion and growth in the sector, but with such close links to the construction industry the recession has dealt a hammer blow to demand for the whitening product, used in paint, plastics and other materials. Production is also being halted at a plant in America.

Since we broke the news on www.thisisgrimsby.co.uk yesterday, many of you have been in touch to express your sadness at the move.

Ray, who now lives in New Zealand, said: "My father-in-law, brother-in-law ,wife, uncle and various friends worked there in the 60`s until the 90`s.

"It was Laportes then and one of the best guaranteed jobs on the Bank and hard to get into.

"Shame to see its going downhill and looks like ending up like Titans ,the only competitor for miles.

"My father-in-law Derek Platts - a joiner there for almost 30 years has passed away, God bless him - my wife Diane used to be a cook in the canteen. My brother-in-law Ken Vincent was your Union Rep and site conveiner for a time.

"I know so many people there. I feel for their jobs. We now live in NZ and it's good here but the recesion is pinching.

"I hope all the employees of the former Laportes are looked after. I hope it gets resolved and jobs are saved for all."

Josephine White added: "Ahhh... Laportes. Such fond memories. Great canteen, on-site shop, coaches to work and 'tilly's'.

"My husband served his time there... (under Johnny Clark's fine if outrageously unappreciated stewardship - and it is said they produced the finest fitters in the land!).

"Once, he and I were hauled over the coals by that tall and scary 'security' manager (forget his name) for having a kiss and a cuddle outside the canteen. Happy, happy days."

A statement from Millennium's corporate communications department read: "These measures are part of a wider programme aimed at improving productivity, efficiency and costs within the business to enable us to maintain and improve our global market position in the longer term.

"We will seek to avoid redundancies at the plant and are consulting with our employees and Unite regarding management of this temporary curtailment. We are also consulting on other cost and productivity improvement measures, both short term and longer term, to increase the competitiveness of the Stallingborough plant, among which is a proposal to make changes to the pension scheme and other benefits offered to our employees."

The plant started life as Laportes in the Fifties, becoming SCM and then Millennium. It was bought out by Lyondell in 2004, before becoming one of eight plants purchased by Cristal in 2007.

Phil Glover, economic development manager for North East Lincolnshire Council, said: "We have got to hope the market picks up as soon as possible as this has an impact on the local economy.

"There is no doubt that the individuals employed will go through all sorts of scenarios in their own minds, and while the council is limited to what it can do, we will be speaking with the company as soon as physically possible to see how we can help.

"It is a large plant and not only does it employ lots of people, but there are support industries which rely on such a plant as well."

A local authority led two-day event at Grimsby Town Hall continues today to help people deal with living on less money and managing personal budgets. Survive and Thrive takes place between 10am and 4pm.