POLITICIANS have held crisis talks with managers at a Newcastle Emlyn factory which is looking at laying off up to 40 staff.

The Canadian firm Saputo runs the town's cheese factory in Aberarad. It is a major employer and takes milk from across West Wales.

News that the company is laying off staff and reports of it cutting its intake of milk could have serious implications for the area, politicians have warned.

Consultation over the redundancies is continuing.

Carmarthenshire AM Rhodri Glyn Thomas and Ceredigion AM Elin Jones have held talks with Saputo.

Mr Thomas said: "We are grateful to the company for meeting with us to discuss the recent problems.

"Our sympathies go to those individuals who have lost their jobs in what is a very difficult time for the community as a whole."

Ms Jones said: "We understand a stabilisation programme is now underway at the site, which will hopefully safeguard the future of the company as a local employer."

She said Saputo was seeking new markets for its cheese.

"Hopefully this will allow Saputo to build for the future," she added.

Councillor Haydn Jones said he and colleges from Carmarthenshire Council's regeneration department were waiting to speak to the company.

"All I can say is that I am concerned regarding the factory's future," he said.

"I understand they will have just 38 jobs left."

He said questions about the company's profit and market still remain unanswered.

Newcastle Emlyn Town Council has also expressed its concern at the loss of jobs and asked the company for an assurance about the factory's future.

The company makes mozzarella, and bought the site after previous owners Dansco went into administration in 2007.