SINGAPORE: Swedish oat milk manufacturer Oatly has announced plans to close its Singapore factory, ending three years of operations in the region. The closure will affect 34 local employees and is part of the company’s broader efforts to streamline operations and improve its financial structure.
In a statement, Oatly explained that the decision is aimed at enhancing the company’s “future cost structure and reducing future capital expenditure requirements.”
The company confirmed that the closure process will be carried out in phases over the coming months, with measures in place to support affected employees.
A spokesperson for Oatly said the company is committed to ensuring all impacted workers receive the assistance they need, including employment support and training programs. “We will work to provide respect and care for all affected employees,” the spokesperson emphasized.
Oatly President Jean-Christophe Flatin described the closure as a strategic move to simplify the company’s operations and focus on execution, with the goal of achieving sustained, structural profit growth.
The closure is expected to result in significant financial impacts for the company.
Oatly anticipates non-cash impairment charges of approximately SGD 27 million to SGD 33 million in the fourth quarter of 2024. Additionally, restructuring and other exit costs are projected to lead to net cash outflows of around SGD 33 million to SGD 40 million by 2027.
The Singapore factory, a SGD 30 million investment, began operations in October 2021 in partnership with local beverage company Yeo Hiap Seng to produce oat milk for the region.
Despite its closure, Oatly stated that anticipated growth in the Asia-Pacific market will now be supported by its European manufacturing facilities.