Oatly Group AB – which claims to be “the world’s original and largest oat drink company” – is ending production in Singapore, one of its early beach heads outside of its native Sweden.
In a late-December filing with the U.S. Securities and Exchange Commission (Oatly is listed on the Nasdaq exchange), the company announced “the closure of its Singapore facility in the Europe & International segment. This action aligns with the company’s asset-light supply chain strategy and is expected to improve the company’s future cost structure and reduce future capital expenditure needs.”
In a connected event, Yeo Hiap Seng, a Singapore beverage maker and Oatly's filling production partner, said “25 of its 41 employees directly involved in Oatly’s manufacturing operation will be laid off due to Oatly’s decision to cease its operations in Singapore,” according to the Singapore Business Review.
“The affected employees were specifically hired to support Oatly’s production at Yeo’s Senoko plant, and the layoff stemmed from Oatly’s evaluation of its supply network,” Yeo’s said.
Yeo’s, as its known, has partnered with Oatly in Singapore since 2019. While Oatly manufacturing will cease, Yeo's will remain committed to supporting Oatly’s distribution in Singapore and Malaysia.
Oatly’s SEC filing said, “Following the closure of the [Singapore] facility, the expected growth in the segment’s Asia-Pacific region will be supported by the segment’s existing facilities in Europe. These actions are expected to further increase capacity utilization of the European factories within the Europe & International segment.”
Earlier this decade, Oatly had aggressive growth plans across the globe. But in the past two years, it’s canceled all new construction and pursued an “asset-light production strategy.”
