A FALL in profits at industrial gases company BOC paints a bleak picture of the state of manufacturing in the UK.

BOC, which owns the Edwards High Vacuum plants at Shoreham, Eastbourne, Burgess Hill and Crawley, turned in a profit of £84.9 million for the quarter to December 31.

This is well short of analysts expectations and down from £93.5 million a year ago.

With trading conditions remaining tough, BOC predicts that demand for gases will remain flat.

But the company said its extensive restructuring programme is on target to deliver cost savings this year.

In August last year the comany announced 175 job cuts at its Sussex operations, although it has since then taken on new office and warehousing premises at Shoreham.

Turnover also contracted sharply last year, for the first quarter it stood at £704.2 million, down from £902.3 million last year.

Danny Rosenkranz, group chief executive said: "The increasingly difficult trading conditions seen towards the end of last year continued into the first quarter.

"The lower volumes were mainly due to continuing weakness in Japan and Asia generally, reduced activity in the steel industry and semiconductor plant closures."

Mr Rosenkranz predicted better news for the group's vacuum technology business, which makes vacuum equipment for the manufacture of semiconductors.

He said there were signs of an upturn in the microchip industry.

"Certain customers are beginning to increase investment and place more orders and, for the first time in many months, order intake ran ahead of sales."

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