Devro announces 90 job losses with site closure

22-Oct-2019 - Last updated on 23-Oct-2019 at 07:15 GMT

Devro said Scotland would remain strategically important to its operations

Collagen product manufacturer Devro has announced the loss of 90 jobs with the closure of its Bellshill site in Scotland.

The proposal was in response to changing trends in consumer behaviour and was part of Devro’s continued drive to achieve a fully integrated global business, the firm claimed.

The reductions will be subject to consultation and Devro said it would work closely with its workforce, trade union officials and Scottish Enterprise in the coming months.

As part of the proposals, Devro intends to increase the portfolio of products manufactured at its Moodiesburn site in Lanarkshire, which recently received a £2m investment.

Strategic review

The announcement followed a strategic review of all Devro’s sites around the world and several months of consideration.

“Scotland will remain strategically important to Devro’s global operations,” said Rutger Helbing, CEO, Devro.

“However, the collagen market is evolving and we must look at how we manage our business and stay competitive. Decisions like this are never easy. I know this will be an uncertain time for many colleagues, their families and the wider community.

“Our priority now is to ensure we have the right support in place for those who may be affected by these plans.”

The firm recently issued a third-quarter trading update from 1 July to 30 September 2019, which included volume growth of 1% for the period. Shore Capital confirmed that the closure of the site would lead to cost savings of £5m from 2021, with a £1m contribution in the financial year ending in 2020.

Commenting on the update, in which the move was confirmed, Shore Capital head of research Clive Black said: "Management has also announced it is proposing to close its Bellshill site in Scotland and relocate some of the manufacturing assets within the wider group (we expect primarily into Czech Republic).

"An exceptional cost of £15m (£10m of cash) will be incurred for Bellshill, with no change to previous full-year 2020 capital expenditure guidance (£18m)."

Meanwhile, hundreds of jobs are also set to be lost with the proposed closure of the Pennine Foods factory in Sheffield, owned by 2 Sisters Food Group.

However, bakery firm Peter’s Food Service has announced the creation of 110 new jobs as it ramped up expansion plans.