Up to 130 workers could lose their jobs at sausage casing manufacturer Devro.
The company, which employs 520 people at two plants in Scotland, announced on Wednesday (21 May) it was entering into a 45-day consultation period with staff, as part of a programme to “refocus and streamline the group’s manufacturing worldwide”.
The proposals were part of Devro’s long-term plan to modernise the company’s manufacturing base, said CEO Peter Page, with the company concentrating on its newest and most cost-effective technology, and the use of older, less efficient technology being phased out.
The consultation follows an announcement last November the company was investing £40m to build a new plant in the US. A further £50m investment for a new plant in China was announced in March.
“Many factors have influenced our thinking, most importantly trends in consumer demand, future growth prospects and how we can best take advantage of new opportunities in emerging markets,” said Page.
“These are very difficult proposals to make but they are the right ones for the future of Devro. By taking this action now, we can maintain a competitive advantage and plan for a strong business based in Scotland, having invested over £30m here since 2008,” he added.
Total group revenue for Devro stood at £242.7m in 2013, up from £241.1m in 2012, while operating profit was down 0.7% year on year, to £42.1m.
The potential job cuts were a “devastating blow” according to Tam Connarty, industrial officer for trade union Unite.
“These are dark times for manufacturing jobs in Scotland and our crucial food manufacturing sector is particularly bearing the brunt of this ongoing decline,” he said.
With Devro’s decision to cut jobs following recent job losses at other Scottish-based food manufacturers, including Vion in Broxburn and 2 Sisters in Coupar Angus, Connarty added: “We’re constantly being told that an economic recovery is underway, but I can tell you it’s not being felt by working people and their families in towns and communities across the likes of Lanarkshire.”