According to the company, the plan is to save £5m in 2007, £10m in 2008, £10.5m in 2009 and £11m from 2010 onwards.

"The outsourcing of our UK manufacturing operations is essential for Raymarine to remain competitive in today's markets, " said CEO Malcolm Miller. "A number of our competitors already have manufacturing operations in lower cost environments."

The Raymarine Group will retain its research and design operations, sales and marketing and group functions, together with its service and repair facilities, in Portsmouth. The facilities and functions in Merrimack and Ft Lauderdale, USA will also be retained.

Distribution of products to customers will be unaffected by this change, says Raymarine.

While the object of this exercise is to save money, Raymarine points out no material savings are likely to be achieved in 2005 or 2006 because of the costs of the project.

A company statement said there will be an exceptional charge of approximately £15m in the current financial year and approximately £6m in 2006. The cash element of these charges is likely to be around £6m in 2005, £8m in 2006 and £2m in 2007. These charges largely relate to redundancy payments, retention bonuses, property and dilapidation costs, additional consultancy costs, costs associated with the physical transfer of assets and asset write-downs.

In addition, incremental capital expenditure of approximately £1m is likely to be incurred in 2005, approximately £3m in 2006 and £1m in 2007.

"We are acutely aware of the impact this will have on our employees and of Raymarine's responsibilities in this regard, " said Miller. "We are sympathetic to this and are therefore striving to support our employees wherever possible in the form of outplacement and re-training advice."

The firm is now in a 90-day consultation period with workers but plans to close its factory by the end of next year.

The first redundancies will bite later this year.