Oatly Group AB, a Swedish producer of oat-based products, plans to close its manufacturing facility in Singapore as part of its asset-light supply chain strategy.

This comes as Oatly competes against Oatside, a Singapore-based alternative milk brand backed by investors like Temasek and Granite Asia.

The decision, pending lender approvals, aims to optimize operational costs and decrease future capital expenditure.

Separately, Oatly told Singapore’s CNA news site that 34 employees in the country would be affected by the decision.

Following its closure, Oatly will support anticipated growth in the Asia-Pacific region through its existing manufacturing capabilities in Europe. The closure will incur non-cash impairment charges ranging from US$20 to US$25 million in the fourth quarter of 2024.

Additionally, restructuring and exit costs are projected to be approximately US$25 to US$30 million through 2027. These costs will be partially offset by proceeds from equipment sales and will also be recorded in the fourth quarter of 2024.