Devro says trading good despite African swine fever, trade wars

(Reuters) - Sausage-skin maker Devro said trading in North America, South East Asia and China was favourable so far in 2019 even as it faces a possible hit to Chinese pork output from African swine fever and trade wars pressuring American hog farmers.

Devro said trading is in line with its expectations, with momentum building after a slower start to the year.

African swine fever has spread rapidly through China, which accounts for about half of global pork output, since the first outbreak was reported last August.

China’s pork production fell 5 percent in the first three months of 2019 and much bigger declines are expected in coming quarters, analysts have said, as the country struggles to contain the spread of the deadly disease.

American hog farmers have been under pressure over the past year from U.S. President Donald Trump’s trade disputes with China and Mexico, two top U.S. pork export markets.

Devro, the maker of edible collagen casings for bratwurst, salami, chorizo and frankfurter, also said on Thursday that it is facing challenging conditions in Russia, Japan and Latin America without providing reasons.

The company, based in Moodiesburn near Glasgow, said its cost saving plans were on track. Devro wants to deliver 16 million pounds ($20.64 million) of cost cuts over the three-year period to 2019.

Devro also said its search for a new chairman is getting closer, as its current Chairman Gerard Hoetmer is set to retire on Thursday.

(The story Corrects headline and paragraph 1 to African swine fever from swine flu)

Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr