Scottish food manufacturer Devro cheered investors yesterday with a 14% dividend increase as it reported resilient growth for 2011.

Sales were up 6.6% to hit £228 million, while underlying pre-tax profit was up 15% to £43m as the sausage skin-maker drove its new synthetic casing into its key developed markets, led by Germany and Japan.

The group employs 2000 people worldwide, including 480 in its Lanarkshire factories at Bellshill and Moodiesburn. Last year the plants saw a £15m capital investment in new high-speed lines, keeping them competitive with Devro factories in the Czech Republic, the US and Australia.

Peter Page, chief executive, said: "Our Scottish factories are able to supply across the range of different types of casing. Devro is a global business but Scotland is a key part of it."

He said a further 12 staff had been recruited at Bellshill, adding: "Order books are looking very strong and we are really pleased for our Scottish business."

Mr Page said that while sales growth in the emerging markets of Latin America, Russia and eastern Europe had continued, the more significant near-term opportunity was the advance in established markets of the group's Select casing.

Launched in 2010, Select is a sheep-gut substitute used to case premium sausages. Already it has grabbed 4.3% of Devro sales and 5% of revenues.

Mr Page said: "Germany is a big traditional market when it comes to sausages, but 30% of our sales there are now Select and growing – there is now an acceptance of the concept."

The market for collagen, used to make most synthetic casings, grew by 10% last year but varied widely across different economies. Devro's 4.6% growth was due largely to the new product.

In the UK, where collagen casings already have around three-quarters of the sausage market, the year saw strong supermarket discounting and promotions of premium sausages.

"The resultant effect on Devro's sales volumes was offset by improved UK pricing and the opportunity to export a greater proportion of our UK production to meet growing demand in other markets," Mr Page said.

China prospects remained attractive, he said, adding: "Although 2011 sales volumes in China were very limited, Devro products have been introduced to all of the leading sausage manufacturers, with a view to developing business in 2012 and 2013."

The group saw its debt almost double last year from £12.2m to £22.7m as Devro invested £43m to add 4% to capacity, with a further 8% coming onstream in each of the next two years.

Mr Page commented: "I would rather look at 16% gearing as the best acquisition we can make. It allows us to put new technology into existing plants as we have done at Bellshill, and it is a very low risk way of growing the business."

Speaking about acquisitions, he said: "We have in the past looked at all the possibilities and each time, you think you are picking up someone else's problems and paying for it."

Mr Page said aside from the obvious challenges of energy, labour costs and competitors in what was "not an easy market", he saw 2012 as offering the challenge of "keeping up with demand and operationally keeping up with all the opportunities we have for growth".

On the dividend, which rises from 7p to 8p, the chief executive said Devro was now returning twice as much to shareholders as four years ago.

The shares, recently at a high of 296p, dropped 18.8p to 275.2p.

Investec Securities, however, said in a note that results were ahead of expectations, and increased its price target to 335p.