Growing Chinese demand helps Devro exports to surge

SAUSAGE skin maker Devro yesterday unveiled a rise in sales during the first quarter, as export growth made up for a slow start to the year in its domestic market.

Steve Hannam, chairman of the Moodiesburn-based firm, told investors at its annual general meeting that eastern Europe, Japan, Latin America, Russia and south-east Asia were “all demonstrating solid growth”.

Hannam described trading conditions in the UK as “slow”, but added that sales of the company’s up-market “Select” range of collagen products – which replace sheep gut in premium sausages – had increased in Europe and Japan.

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He added: “Manufacturing performance was slightly below expectations early in the year, but recent performance is much improved.

“The newly installed lines in Scotland are in full production and product development work continues on the new line in the US.”

Replacing older machines at its factory in Bellshill helped Devro to post a 22.4 per cent rise in profits before exceptional items to £43 million in 2011, on the back of a 6.6 per cent increase in turnover to £227.7m.

Devro, which employs more than 2,100 people, is also installing more efficient equipment at its facility in the Czech Republic.

Chief executive Peter Page said: “The continued growth in volume and value of sales, across a wide variety of markets, is most encouraging and reflects well on our strategy for long-term growth.”

Devro and its peers have enjoyed rising sales in China and other developing markets in south-east Asia as the growing middle-classes spend more money on processed meat.

The firm sells cases made from collagen, the same material that makes up the connective tissue found in all mammals, which is designed to replace sausage skins made from animal guts.