UP TO 40 jobs may be lost at one of East Lancashire's most successful businesses.

And the managing director of Emerson & Renwick -- which sells machinery across the world -- warned that manufacturing in the area was now in "dire straits" because of the problems caused by a strong pound.

The firm was one of the biggest local exporters to Europe but sales have collapsed because the strength of the pound makes its equipment too expensive to buy there.

The workforce at the Church site, and a sister factory at Bridlington, have been warned between 20 and 40 jobs will go from the combined 160-strong staff. The losses are likely to be split evenly across both sites.

Consultations are continuing between management and employees.

The firm manufactures production machinery for the wallpaper, automotive and textile industries and last year 70 per cent of its production was exported to markets including Europe, America and Japan.

The strong pound has seen its exports to Europe plummet from £5million a year ago to just £400,000.

"Our equipment is 25 per cent to 30 per cent more expensive now than it was a year ago and that is purely because of the strength of the pound," said managing director Colin Hargrave.

"It is very tough out there. Our German and Italian competitors are taking a lot of business in Europe. We recently got quite a big order from Belgium but there is very little money in it for us."

Mr Hargrave said he could see no sign of the situation improving.

Although the firm's UK and US markets were holding up well, the European situation was having a major impact on the company.

"Manufacturing in this region is now in dire straits. A lot of the customers we supply locally are in the same situation."

Over the last 12 months, the strong pound has been blamed for the loss of thousands of manufacturing jobs in East Lancashire.