Oatly, the Swedish oat milk company, is closing its manufacturing plant in Singapore after evaluating its supply chain network in the region.
This was the company’s first factory in Asia, serving the APAC region. With this closure, the region will be served instead by Oatly’s Europe facilities.
Furthermore, the company also has a production facility in China and a separate Greater China segment.
Oatly said in its statement that the move “aligns with the company’s asset-light supply-chain strategy.” According to the statement, the closure is expected to improve Oatly’s future cost structure and reduce the need for future capital expenditure.
Jean-Christophe Flatin, the CEO of Oatly, added that the closure of the manufacturing facility in Singapore will “help to optimise the company’s production capacity while being efficient with its capital and costs.”
Layoffs ensue
The closure will impact a total of 59 workers, including 34 Oatly employees.
The remainder were employed under the Singaporean beverage company Yeo Hiap Seng (also known as Yeo’s).
Yeo’s reported that the affected employees were hired specifically to support Oatly’s production at Yeo’s Senoko plant, and the layoff is a direct result of Oatly’s evaluation of its supply network.
“Yeo’s has made every effort to reassign as many as possible, and has successfully placed 16 employees in other roles within Yeo’s,” the company said in a statement, The Straits Times reported.
Unfortunately, 25 employees had to be retrenched and will receive severance packages based on their salary and years of service.
The Singaporean beverage manufacturer has partnered Oatly in Singapore since 2019. Despite the plant closure, it will continue to support Oatly’s distribution in Singapore and Malaysia.
Aside from Oatly, there are other oat milk options available in Singapore, with the most prominent one being Oatside, a Singapore-based brand backed by investors like Temasek and Granite Asia.
With the closure, it could be possible that Oatly’s prices in Singapore may fluctuate, perhaps tipping the favour for brands such as Oatside.
- Learn more about Oatly here.
- Read other layoff news we’ve written here.
Featured Image Credit: Oatly / CMR Group