MALVERN'S Three Counties Showground was a hive of activity when it hosted the fourth yearly Herefordshire and Worcestershire Business Festival yesterday.

Some 130 companies ran stands, and a record 1,527 people attended the event, organised by the two counties' Chamber of Commerce.

The day was opened by Nick Paul, chairman of the regional development agency, Advantage West Midlands.

He described the business festival as essential to the continuing success of life in the two counties.

"An event like this is essential to allowing people to come together to exchange ideas, to be inspiring, innovative and entrepreneurial," he said.

"In turn, businesses are here today to make money, and this money is vital to everyday life. It goes into schools, houses, hospitals, and other things to maintain living standards in the two counties."

Mr Paul, who lives in Colwall, near Malvern, admitted the last year has been difficult for the two counties, with the closure of MG Rover having an affect on firms, and big manufacturing companies such as Evesham Foods closing down with the loss of hundreds of jobs.

But he praised firms for the way they had handled the pressure. "Products go through a natural life cycle and unless you are able to refresh these and bring them up to date, you stand to lose business and the company ceases to trade," he added.

"What I admire about companies in the two counties is that they are very good at diversifying. It has been a difficult period, but not as difficult as it could have been, because of this. I was on the original MG Rover task force in 2000 and we worked with two counties supplies to cut their dependence on Rover.

"Five years later, a lot of companies have moved on to other car manufacturers or even other industries.

"Events like the Business Festival encourages firms to make that change and I have nothing but praise for it."

The festival has enjoyed a 30 per cent growth year on year since it was launched in 2001.

Chamber of Commerce president Anne Morris said she was delighted with this event.

"I am really pleased," she said."There was a great buzz." and it was a really successful day. We are already planning the next one."