Oatly Group to Discontinue Oat Milk Production in Singapore

Oatly Group AB, known as the world’s largest oat drink company, has made the decision to end production in Singapore as part of its ongoing shift to an “asset-light” supply chain strategy. The company recently filed with the U.S. Securities and Exchange Commission, stating that the closure of its Singapore facility in the Europe & International segment will help improve its future cost structure and reduce capital expenditure needs.

In response to Oatly’s decision, Yeo Hiap Seng, a Singapore beverage maker and contract manufacturer, announced that 25 out of 41 employees involved in Oatly’s manufacturing operations will be laid off. These affected employees were hired specifically to support Oatly’s production at Yeo’s Senoko plant. Despite the manufacturing shutdown, Yeo’s remains committed to supporting Oatly’s distribution in Singapore and Malaysia.

According to Oatly’s SEC filing, the closure of the Singapore facility will not hinder the expected growth in the Asia-Pacific region, as the segment’s existing facilities in Europe will continue to support operations. This move is designed to increase capacity utilization of European factories within the Europe & International segment.

In recent years, Oatly has shifted its focus towards an “asset-light production strategy,” cancelling new construction projects and reevaluating its supply network. This decision marks a significant shift in the company’s global expansion plans.

Looking ahead, Oatly remains dedicated to providing its popular oat milk products to consumers in the Asia-Pacific region, despite the strategic changes in its production operations. Stay tuned for more updates on Oatly’s evolving supply chain strategy.