UPDATE 1-Northern Foods to axe Wales site, 234 jobs at risk

* Ethnic cuisine ready meals site to close in Swansea, Wales

* Firm failed to agree terms with key customer J Sainsbury

* Sees non-cash impairment charge of 16 mln stg

* Sees one-off cash charge of 4 mln stg next year

(Adds detail, background)

LONDON, April 22 (Reuters) - British food maker Northern Foods NFDS.L plans to close an "ethnic cuisine" ready meals factory in Swansea, Wales, putting 234 jobs at risk after failing to agree terms with key customer J Sainsbury (SBRY.L).

"Mutually agreeable terms could not be reached and as a result, we have reluctantly decided to terminate the existing supply business," Northern Foods, which also makes Goodfella's pizza and Fox's biscuits, said on Thursday.

"Accordingly, we will be commencing consultation with employees on a proposal to close the site."

Northern Foods said its 2009-10 results would include a non-cash exceptional impairment charge of about 16 million pounds ($24.63 million) as a result of the decision.

Subject to the consultation with staff, it also expects to incur a one-off cash restructuring charge of about 4 million pounds next financial year. ($1=.6495 Pound) (Reporting by Mark Potter; Editing by Hans Peters)