Receivers have been called in to take over the Kenneth A Fogg and Son Limited children's clothes factory at Machynlleth, employing 32 people.

Workers were told at 1000GMT on Monday that the factory was closing with immediate effect when factory owner Ken Fogg and the receivers walked into the staff canteen to tell workers the bad news.

Another 29 staff based at the company's Stockport headquarters will carry on working until existing orders from customers are completed.

No one expected this to happen. We were told that we couldn't even go back and finish our work but that we had to finish there and then. Machinist Meg Williams

Machinist, Meg Williams from Machynlleth said the news had come "like a bolt from the blue".

"Ken Fogg was obviously very upset and then he said he was very sorry but the factory was closing down," she said.

"No one expected this to happen. We were told that we couldn't even go back and finish our work but that we had to finish there and then."

This is the second time that Mrs Williams has been made redundant from the same factory site in the last seven years.

'Far East'

In August 1997 the Laura Ashley clothes plant at the Treowain Industrial Estate site closed down but was taken over by south Wales company, MDM Ltd for �1.

But four months later that company went bust leaving machinists out of work for four months until the Welsh Development Agency attracted Kenneth Fogg and Son Ltd to the factory.

The company has been operating in Machynlleth since May 1998 with set-up grant aid from the WDA.

But on Tuesday the Machynlleth factory was put in the hands of joint receivers, David Whitehouse and Simon Wilson of Kroll's Corporate Advisory and Restructuring Group. "Whilst this business supplies a number of high street chains, continuing price pressures from lower cost countries, particularly in the Far East, have meant that it has been unable o operate profitably," said Mr Whitehouse.

"With this position likely to remain for the foreseeable future there was no other option than to close the business.

A WDA spokesman said they and other groups had been working hard to support the future of the company and they would working with the receiver to try to find other jobs for its employees.

A Powys Council spokesman said: "The loss of 41 jobs in a small town that had been improving its unemployment rate recently is very disappointing."