“Swedish drink company Oatly has made the decision to close its Singapore plant located in Senoko after operating for three years,” the company announced on Wednesday (Dec 18). The closure is part of Oatly’s strategy to enhance its “future cost structure and reduce future capital expenditure needs,” as stated in a press release.
Oatly formed a partnership with Singapore food and beverage company Yeo’s for the production of its oat milk. The S$30 million (US$22 million) production facility was inaugurated in October 2021.
Regarding the impact on employees, Oatly revealed that 34 individuals in Singapore will be affected by the closure. A spokesperson mentioned that the layoffs will occur “through a phased approach over the coming months.” The company is committed to supporting the affected employees by providing outplacement assistance and training, ensuring they are treated with respect and care aligned with the company’s values.
Yeo’s has not yet provided additional information upon request from CNA.
The Food, Drinks and Allied Workers Union (FDAWU) noted that Oatly is a non-unionized entity. FDAWU President Julie Cheong stated that the union will offer support to affected union members, utilizing resources from the wider labor movement network, including services from NTUC’s Employment and Employability Institute for job matching and career advisory.
In 2021, Oatly inaugurated its first production plant in China, located in Ma’anshan, Anhui province. This facility has the capacity to manufacture around 150 million liters of oat-based products annually, surpassing the Singapore plant’s output of 60 million liters.
Oatly CEO Jean-Christophe Flatin highlighted that the decision to separate the greater China business from the Asian business resulted in significant improvements in the health of the company’s operations in Greater China. Flatin expressed expectations that the closure of the Singapore plant will build upon the existing improvements and further enhance operational efficiency, ensuring the right capacity when necessary while optimizing capital and costs.
In acknowledgment of the contributions of the Singapore plant team, Flatin expressed gratitude, stating, “I want to express my deep gratitude to the team at the Singapore plant for the work they have done over the years.”
As part of the closure process, Oatly anticipates incurring non-cash impairment charges ranging from US$20 million to US$25 million in the fourth quarter of 2024. Additional restructuring and exit costs are projected to cause net cash outflows from US$25 million to US$30 million through 2027.
Following the closure of the Singapore facility, Oatly announced that its growth plans in the Asia-Pacific region would be supported by its facilities in Europe.
