Tiia Monto

Oatly Cancels Construction of Two New Plants, Meeting Demand in Current Facilities

Nov. 14, 2023
The projects in the Americas and EMEA segments have been shelved in conjunction with Oatly’s “asset-light” strategy.

Swedish oat milk processor Oatly Group AB announced that it was cancelling construction of two new production facilities in its Americas and EMEA business segments, in conjunction with the release of its third-quarter financial results.

Company CEO Jean-Christophe Flatin said Oatly is “doubling down” on its “asset-light production strategy” with the decision to halt the construction projects, as the company has found ways to expand capacity at current facilities enough to meet growing demand for products.

“We believe that this change in our approach will increase our focus by reducing the complexity of the supply chain, which increases our confidence in our longer-term margin targets,” Flatin added. “We also now expect to have lower capital expenditure requirements, and we expect to spend below $75 million in capital expenditures in each of 2023 and 2024.”

Profitability for the third quarter exceeded Oatly’s internal expectations, the company said. Additionally, Oatly adjusted its 2023 outlook and expects full-year 2023 constant currency revenue growth to be closer to the low end of its 7-12% range, with fourth-quarter gross margin coming in around mid-20%, the announcement stated.

About the Author

Andy Hanacek | Senior Editor

Andy Hanacek has covered meat, poultry, bakery and snack foods as a B2B editor for nearly 20 years, and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. In 2018, he won a Folio:Eddie Award for his unique "From the Editor's Desk" video blogs, and he has brought home additional awards from Folio and ASBPE over the years. In addition, Hanacek led the Meat Industry Hall of Fame for several years and was vice president of communications for We R Food Safety, a food safety software and consulting company.

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