Two textile companies in the North are to set up a new £1 million sterling (€1.59 million) joint venture fabric finishing company that will employ 60 people in Lurgan, Co Armagh.

Riverside Textiles has been established as a result of a new partnership between Samuel Lamont Holdings and Valley Dyeworks.

The company will be based at the former Clendinnings textile factory in Co Armagh, which closed more than 18 months ago and will employ 30 of its former staff and create 30 additional jobs.

Riverside Textiles bleaches, dyes and prints fabric for the household and workwear market sectors.

It draws together three fabric-finishing businesses - Riverside Textiles, a Samuel Lamont subsidiary, Valley Dyeworks and Clendinnings - on the one site.

It is the latest move by the North's textile sector to reposition itself following substantial job losses and company closures.

Last month, Desmond & Sons announced plans to establish a new £6 million joint venture with Marks and Spencer to source and design children's wear to its stores.

The Zip Project will employ 220 people in total and create 53 additional jobs at Desmond's headquarters in Drumahoe on the outskirts of Derry.

Mr Lawson McDonald from the North's Industrial Development Board said the merging of three businesses on to one side would strengthen its competitive advantage.

"This is an important development for the Northern Ireland textiles industry and is a further example of the type of strategic partnership with a greater emphasis on design for niche markets recommended in the recent Kurt Salmon action plan," he added.

Riverside Textiles has been offered selective financial assistance of £212,400 sterling by the Industrial Development Board towards the costs of this investment.