MALMÖ, SWEDEN— Oatly Group AB closed its Singapore facility in the company’s Europe and International segment in a move designed to improve future cost structure and reduce future capital expenditure. Existing facilities in Europe will support expected growth in the Asia-Pacific region, according to the Malmö-based oat drink company.

As part of closing the facility, Oatly expects to incur non-cash impairment charges of about $20 million to $25 million in the fourth quarter of 2024. In addition, the company estimates restructuring and other exit costs will result in $25 million to $30 million of net cash outflows through 2027, after considering anticipated proceeds from selling certain equipment.

“Over the past two years, our supply chain teams have done a good job at improving utilization, efficiency and reliability while also finding solutions to enable us to gradually expand capacity when needed to support our growing business,” said Jean-Christophe Flatin, chief executive officer of Oatly. “These actions have led to strong service rates and improved gross margins. Additionally, our prior decision to separate our greater China business from the rest of the Asian business has enabled us to increase our local focus and competitiveness, which has led to significant improvements in the health of our greater China segment.

“We expect that the action we are announcing today will capitalize on those collective improvements and further strengthen our ability to ensure that we have the right amount of capacity, when we need it, while being efficient with our capital and costs.”