THE new chief executive of Devro, Rutger Helbing, has said the sausage skin producer’s Scottish manufacturing operations remain important to the group amid the uncertainty triggered by the Brexit vote.
Speaking after Lanarkshire-based Devro posted a two per cent increase in first half profits Mr Helgin said all the group’s manufacturing facilities had been performing well.
With around 400 employees in Scotland, Devro has factories in Moodiesburn and Bellshill. It also has plants in the Netherlands and the Czech Republic.
The stock market-listed firm invested in new factories in China and the US under Peter Page who stepped down in February after 10 years in charge.
Asked about the outlook for the Scottish operations, Mr Helbing said: “They are a key part of the group. They’re clearly a significant part of our installed manufacturing base; we’re always looking at how we can optimise globally … but I think there’s definitely an important role for Scotland to play in that.”
Devro has built a £2 million combined heat and power plant at the Moodiesburn site, which will help it reduce costs.
Noting Devro exports products to continental Europe and imports hides from Ireland, Mr Helbing said the company is monitoring the preparations for the UK’s departure from the European Union closely.
The company would prefer existing trading arrangements to be maintained, rather than the UK having to apply tariffs on World Trade Organisation lines.
But asked if Devro had any plans to move production, he said no noting trade would be possible under WTO provisions. “It will be just a bit more administrative burden and some tariffs,” noted Mr Helbing, a Dutch national who joined Devro as finance director in 2016.
Mr Helbing said Devro made good progress in the six months to June 30.
The group grew underlying operating profit to £18.4m from £18.1m last time. Revenues fell to £120.2m from £125.2m after Devro stopped selling some lower margin legacy products in China.
“We have significantly improved the North American plant performance, and increased the average selling price in China by 19% ,” said Mr Helbing.
Sales volumes in Continental Europe grew significantly amid strong snacking growth in the key markets of Germany and Poland, market share gains in Italy and new customer wins.
It achieved good growth in the North American snacking market but volumes were marginally down due to the timing of orders.
Latin America volumes grew significantly helped by Devro winning new customers in Brazil.
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