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Meat firm blow

Devro to axe 90 jobs with closure of Bellshill plant

Devro

Devro makes skins for sausages

Meat casings company Devro is closing its Bellshill site with the loss of 90 jobs and will switch production to its Moodiesburn plant.

Bellshill will close next year and the company will incur an exceptional cost of £15 million helping contribute cost savings of £5m.

There will also be partial write-downs of the China and US plants. These plants continue to be an integral part of the firm’s global footprint and the revised supply strategy “will enhance the agility and flexibility of the Group’s supply chain”.

The company said sales momentum improved during Q3 2019 with 1% volume growth in collagen casings (H1 2019: -1%). Good trading in North America and China was offset by a further deterioration in market conditions in Continental Europe and weaker than expected sales in Japan. As anticipated, UK & Ireland and Australia saw similar trends to H1 2019.

“We continue to expect a modest acceleration of volume growth in Q4 2019 with full year volume growth expected at c.1%. Our cost saving initiatives are progressing well and we are confident of achieving our guidance of £7 million in FY 2019.  We continue to expect the covenant net debt / underlying EBITDA ratio to be around 2x at 31 December 2019.

“Our expectations for the full year remain broadly unchanged as growth in underlying operating profit through higher volumes, delivery of costs savings and positive FX will be offset by adverse country/product mix, lower revenues from other products and energy and wage inflation which was highlighted in previous announcements.”



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