More than a century of steel history is to end with the closure of the Avesta works at Panteg and the loss of 116 jobs.

The AvestaPolarit plant is earmarked for closure at the end of March 2004 after years of poor financial performance, parent company Outokumpu announced yesterday.

Hugh Williams, site manager, said: "The difficult proposal to close the Panteg works has been made as a result of the consistently poor financial performance over recent years.

"The scale and size of the operation has been the main contributory factor for the proposal, despite the best efforts of a thoroughly committed workforce.

"It's with great regret this proposal is having to be considered." The Panteg plant produces stainless steel sheets and coils, and has lost about £35m since 1997, the company said.

A steelworks has operated at Panteg for more than a century but was taken over by Finland-based AvestaPolarit in recent years, following a merger.

The proposed closure will result in the redundancy of all 116 employees at Panteg and approximately 20 job losses at the company's Sheffield site.

The company has put aside more than £9m to cover the cost of the proposed closure. The firm is also expanding its Finnish operation.

A spokesman for AvestaPolarit said: "These changes are the subject of consultation, which will immediately commence with the Panteg workforce and the appropriate trade unions.

"We will consider all reasonable, practicable measures to alleviate personal hardship. The discussions will aim to identify schemes to assist employees whose positions are at risk, in order to provide redundancy counselling, job search facilities and retraining opportunities."

Michael Leahy, community union general secretary at the ISTC, said: "This is a tragedy for those losing their jobs, their families and the whole Pontypool community. I worked at Panteg in the 1960s and 1970s when it employed thousands and I know what the impact of these redundancies will be.

"The ISTC will be meeting AvestaPolarit and asking it to reconsider the decision to close the plant.

"South Wales has suffered thousands of jobs losses in the steel industry in the recent past."

Councillor Bob Wellington, deputy leader of Torfaen Council, said: "We are very disappointed that the company has taken this decision, particularly in light of the capital expenditure it has made on the site over recent years.

"But now the decision has been taken, we will work with the company to assist in any practical way we can.

"Team Torfaen, a partnership of all parties able to offer support, will be co-ordinated by the council to give staff every opportunity to find alternative employment.

"We also hope to work with the company and the Welsh Development Agency to get the site redeveloped as soon as possible."

Steel workers leaving the plant at Panteg last night were shocked but not surprised by the announcement that it would close in March next year.

For Leighton Tovey, 43, of New Park Road, Risca, it was his second redundancy in twelve months.

He said: "Whether we can transfer has got to be discussed with the unions, but there are possible transfers up to Sheffield.

"The government's not stopping these companies shutting and taking their business abroad.

"It's pretty demoralised in there at the moment. They're all down in the dumps. But for me, I'm used to it.

"My last job was at Alcan. I've only been here eight months. I got laid off last Christmas and it's another stab in the guts.

"That's two Christmases on the trot now. I was only out of work for six weeks last time and I thought I'd be okay for a couple of years.

"But there's probably people in there with 20 years service who must be reeling."

Tony Blackmore, 44, of Graig View, Upper Cwmbran, said: "I'm not too impressed with the news. It was a shock - we were told we were going in for a briefing and they told us we were closing."

Steve Collins, 43, of Coed Eva, said: "We've known for about two weeks they were in trouble and they were losing money, so it's no surprise, but last year we heard they were shutting and they didn't.

"We knew the plant was in a bad way, and Panteg has been rumoured to be shutting for donkeys years.

"They said it was going to be short work for two months and we knew there was something in the air, but we're all gutted.

"I've been there 19 years but I've had other jobs before. There's people in there who've never done anything else."