Bradford's huge Ciba chemical plant is facing a squeeze on margins due to the high price of gas and oil, the company said today.

The sprawling Low Moor plant, which is a major part of the Swiss-owned chemical business, has been hit by a global shortage of raw materials.

Yesterday, Ciba announced a slight upturn in fortunes for the global business, with sales up slightly in the past six months on the back of improving economic conditions. But the firm said the upswing had been "volatile and only visible in selected markets, with sizeable swings between individual months".

Ciba Bradford plant director Rodney Swailes, above, said the Low Moor plant, which is chiefly focused on the water treatment division of the business, had performed "better than the group overall".

"Sales have shown a steady climb for the last two or three years and we are trying to push our effort in the market to get prices up as well as producing the product as efficiently as we can," he said.

The Bradford site produces around 25 per cent of the company's total output in tonnage terms, but has been hit hard by the recent rises in oil prices, sparked by the Iraq war.

"It is tough," said Mr Swailes. "You can trace most of the raw materials we use back to oil, and the global shortage of raw materials has affected us.

"The price of crude oil has an impact on raw materials but gas prices have also gone up and we use a lot of gas to power our plants."

Earlier this year, the Telegraph & Argus revealed that Ciba was to cut about 90 jobs from its 1,175 workforce in Bradford, chiefly as a result of investment in new machinery.

Talks have been ongoing with the GMB union and letters have now gone out to staff who might be interested in taking voluntary redundancy.

Mr Swailes said it was unclear at this stage if any compulsory redundancies would have to be made although that process would be unlikely to happen before the middle of next year.

However, the company has begun recruiting its first new engineering apprentices locally for several years.