A HAULAGE company has signed a multi-million pound contract and set up a new business despite rising fuel prices.

Macgregor Europe Ltd has secured a deal to transport vehicle parts from manufacturers to LandRover plants in the Midlands.

The rolling deal is worth at least £1.2million a year.

The company, based at Holmefield Mill, Gisburn Road, Barrowford, has also launched a new business called Kid Gloves Home Delivery Service.

The business delivers goods for home shopping firms including Findel, whose parent company Express Gifts is based in Church.

It was launched just over a month ago and is currently generating about £12,000 a month.

Macgregor Europe also recently finished extending its warehouse on the former Time Technology Park, Simonstone, from 70,000sq ft to 150,000 sq ft.

The developments come despite an increase in oil prices which have seen diesel prices at petrol station rise well above £1 a litre and are expected to create a number of new jobs.

Peter Macgregor who founded the firm said: "We now outlay about £65,000 a month in diesel which is about 15 per cent more than a year ago.

"When there is rises you try to absorb the costs because if you pass them on to the customer they will look elsewhere.

"It is a really competitive market and many companies, especially the smaller operators cannot afford to do it.

"We are able to make savings through the efficiency of our warehousing and distribution."

Macgregor Europe was set up in the 1990s specialising in transporting stock for retailers to distribution centres throughout the UK.

The company employs 55 people in East Lancashire and also has depots in Birmingham and Coventry.

The firm currently has a turnover of about £4million which is expected to break through the £5million barrier next year.

Earlier this year Macgregor Europe also spent more than £1million which included taking delivery of 17 new wagons and 25 trailers.