ETHICON, the surgical sutures business owned by Johnson & Johnson, has announced plans to wind down operations at Edinburgh and Livingston with the loss of about 850 jobs.

The company aims to close its sutures manufacturing facility at Sighthill, Edinburgh, as well as adjacent needle production at Crossway, by the end of 2005. A distribution facility at Livingston will also be shut, but suture manufacturing at Livingston - where about 500 people are employed - will not be affected.

Neil Ryding, vice-president of European operations at Ethicon, said the decision was taken to shift production to lower-cost areas after a year-long review: ''We evaluated every other option and scenario out there. There was no alternative.''

Ethicon, which has manufacturing facilities at 12 locations around the world, said suture work would be gradually shifted to the company's plant in Puerto Rico. Needle production will be transferred mainly to sites in Brazil, the US and Germany, while distribution work will be handled from an existing Ethicon site in North Yorkshire.

News of the decision spread rapidly after staff were informed yesterday afternoon. Raymond Wilson, senior regional industrial organiser for T&G Scotland, described the announcement as ''a bolt from the blue''.

''They are profitable plants and have an excellent workforce so why move to Puerto Rico and Brazil? It can only be for cheap labour,'' Wilson said. ''I'm hopeful we can reverse this decision.''

Kenny MacAskill, Lothians MSP for the SNP, said the job losses were a further blow to Scotland's already battered manufacturing sector.

The Ethicon closures are the second-largest job losses to be announced in Scotland this year, trailing only behind the decision by healthcare chain Boots to shut its Airdrie factory with the loss of 1000 jobs.

However, the manufacturing sector has suffered from a succession of high-profile closures in recent years, with the electronics industry bearing much of the pain.

Ryding confirmed that the decision was brought about by cost pressures, as many of Ethicon's global plants undertake similar work, thus driving up operating costs.

Asked whether plants in other countries might be affected by this consolidation, Ryding said: ''I can't comment on other sites outwith this decision, but I would say I don't think any facility can give you cast-iron guarantees.''

The Livingston sutures plant, located at the Kirkton Campus, won't be affected as it specialises in synthetic absorbable suture finishing that eventually dissolves into the body without needing to be removed. This requires sophisticated sterilisation techniques that have led to significant technological investment over the years.

By contrast, the Edinburgh facility makes the more traditional non-absorbable sutures. Ethicon has been manufacturing at this site since 1947.

Ryding said Ethicon was aware of the impact the closure would have on staff, their families and the community, and would do ''everything within reason'' to assist them. He added that the majority of the job losses in the first 12 months would likely stem from voluntary redundancies, with the transfer of activity picking up pace thereafter.

''In addition to offering severance terms well ahead of statutory requirements, we will offer career or personal counselling, consider re-training if required and practical help in finding other jobs,'' he said.

Jim Wallace, minister for enterprise and lifelong learning, promised to work closely with Ethicon to minimise the impact of the planned closure.

He added that while the decision would come as a major blow to employees, it was not a reflection on the Scottish business environment or the workforce.

''The decision was based on re-aligning operations on a global basis and reducing duplication,'' Wallace said.

Ethicon, which forms part of Johnson & Johnson's medical devices division, is one of some 200 businesses that make up the J&J group. The US healthcare giant has annual revenues of about (pounds) 22bn.