Swedish oat milk producer Oatly announced that it will close its manufacturing facility in Singapore, the company’s first in Asia, to streamline its supply chain. This decision, revealed on December 18, aims to serve the Asia-Pacific market through Oatly’s existing facilities in Europe.
Opened in October 2021 in collaboration with Yeo Hiap Seng, the Singapore plant produced up to 60 million liters of oat milk annually, sourcing oats from Sweden. The closure marks a strategic shift in Oatly’s asset-light supply chain approach.
Oatly’s CEO, Jean-Christophe Flatin, stated that the move will optimize production capacity while reducing capital costs. The separation of Oatly’s Greater China business from the broader Asia market has already led to significant operational improvements.
Following the closure, Oatly expects non-cash impairment charges between $20 million and $25 million in the fourth quarter of 2024. Additionally, restructuring will result in net cash outflows of $25 million to $30 million through 2027, accounting for anticipated equipment sales.
Flatin expressed gratitude for the Singapore team’s efforts over the years, emphasizing the importance of simplifying operations to focus on sustainable growth. This strategic decision reflects Oatly’s ongoing commitment to enhancing efficiency while pursuing its mission of promoting plant-based alternatives in a competitive market.
Source: The Strait Times Swedish oat milk producer Oatly announced that it will close its manufacturing facility in Singapore
