Half the workforce have been told they have lost their jobs at a label firm hailed as a booming company.

Some 25 workers at Hong Kong-based Keighley firm SML have been told they are being made redundant only months after the company was being touted as a success by regional development agency Yorkshire Forward.

The company's finance director Peter Hee confirmed today that 25 out of a total workforce of 50 had been told they were being made redundant but declined to comment further. He said he was unable to explain why the company was making half its workforce redundant after such a rosy picture was painted in July.

The firm was chosen by Yorkshire Forward as one of three thriving Chinese-owned companies in the region to take part in an event aimed at bringing in further investment from China.

A Chinese delegation visited SML along with firms in Halifax and Grimsby in July in a promotional event hosted by the regional development agency.

Chinese business people are being encouraged to invest in other countries by China's president Jiang Zemin.

SML was set up in 1985 in Hong Kong and has been growing for the last 15 years to make it the third-biggest label manufacturer in the world.The firm's biggest customer is GAP and it also manufactures the Pure New Wool label.

The company, based in South Street, is part of a global empire owned by 42-year-old Chinese entreprenuer Suen Siu Man and is the only Chinese-owned company in Yorkshire.

It was originally founded by the current general manager John Davison and was taken over by global group SML two years ago and manufactures 100 million clothing labels a year.

The Keighley factory is the first in Britain to be owned by the parent company which has two other manufacturing outfits in China and another in San Francisco.

The group was set up by Mr Suen after he fled China penniless. He and his wife took a boat and ended up swimming the last three miles to Hong Kong where he eventually set up his business.