Oatly, the Swedish oat milk company, has announced the closure of its manufacturing plant in Singapore as part of a strategic evaluation of its supply chain network in the region. This decision marks the closure of Oatly’s first factory in Asia, which served the APAC region, with production now being shifted to Oatly’s facilities in Europe. In addition to its Europe facilities, Oatly also operates a production facility in China as well as a separate segment for Greater China.
According to a statement from Oatly, the closure of the Singapore manufacturing facility is in line with the company’s asset-light supply-chain strategy. The move is expected to improve Oatly’s future cost structure and reduce the need for future capital expenditure. Oatly’s CEO, Jean-Christophe Flatin, emphasized that the closure will optimize the company’s production capacity while maintaining efficiency in capital and costs.
The closure of the manufacturing plant in Singapore will result in layoffs for a total of 59 workers, including 34 Oatly employees. The remaining employees were hired under the Singaporean beverage company Yeo Hiap Seng, also known as Yeo’s, to support Oatly’s production at Yeo’s Senoko plant. Despite the layoffs, Yeo’s has made efforts to reassign as many employees as possible, with 16 employees successfully being placed in other roles within the company.
Unfortunately, 25 employees had to be retrenched and will receive severance packages based on their salary and years of service. Despite the closure of the manufacturing plant, Yeo’s will continue to support Oatly’s distribution in Singapore and Malaysia. In the wake of the closure, consumers in Singapore have alternative oat milk options such as Oatside, a local brand backed by investors like Temasek and Granite Asia. This may lead to fluctuations in Oatly’s prices in Singapore, potentially benefiting brands like Oatside.
As Oatly navigates this transition in its supply chain network, it remains committed to providing consumers with high-quality oat milk products. Stay updated on Oatly’s latest developments and industry news to learn more about the company’s evolution.
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