Croatian sock maker MTC is to axe half of its 500-strong workforce as part of a $1.4 million project to upgrade its technology.

The firm, in which privatisation fund Dom Fond holds a majority stake, will cut 250 jobs including those of the 99 employees who halted production during a recent visit from its German business partner.

The construction of a new factory by Italian socks and stockings producer Calzedonia in the Croatian town of Cakovec will not threaten MTC's position, the MTC board said on Tuesday.

Directors added that Calzedonia was a good MTC partner and revealed the two companies are soon expected to sign a $1.1 million contract.

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