The AR Clark sausage skin factory in West Wyalong, Australia, has announced it is winding down operations with the loss of 30 jobs.

The closure comes as a result of a shortage of sheep and lamb intestines used to make sausage casings, and high cost of the raw materials that are available.

Managing director Bob Clark says the closure is the best way to ensure that workers get their entitlements and creditors are paid in light of the decreased outputs, ABC reported.

"Well, it's a temporary thing because even our competitors are in the same boat, we are all in the same boat, and so it's a matter of making realistic commercial courses of action to ride out a very difficult short period," he said.