59 workers to be laid off in Oatly's Singapore plant closure

Among them are 25 from Yeo's involved in manufacturing for Swedish oat milk maker

- Tay Hong Yi

Beverage giant Yeo Hiap Seng (Yeo's) will lay off 25 of its employees directly involved in the manufacturing operations of Swedish oat milk producer Oatly.

The Straits Times understands that these 25 employees are in addition to the 34 Oatly employees affected by the closure of the Oatly plant here, bringing the total to 59.

The remaining 16 of the 41 Yeo's employees in the Oatly plant have been redeployed to other roles within Yeo's, the company said in a statement accompanying a bourse filing on Dec 19.

Meanwhile, the 25 affected staff will receive severance packages based on their salary and years of service, it added.

Yeo's said its 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.

The Swedish producer had announced on Dec 18 its plans to close its Singapore facility in a bid to improve the company's future cost structure and reduce future capital expenditure needs.

US-listed Oatly's share price slid 5.46 per cent following the news, while the mainboard-listed Yeo's counter ended flat in Singapore on Dec 19.

Yeo's noted that it has partnered Oatly in Singapore since 2019.

"While manufacturing operations will cease, the group remains committed to supporting Oatly's distribution in Singapore and Malaysia," Yeo's said.

ST asked Oatly whether prices for its products here would be affected by the move, but the company would only refer to its Dec 18 announcement.

Yeo's added that it informed the Food, Drinks and Allied Workers Union (FDAWU) upon the announcement by Oatly on Dec 18.

Yeo's said it has been working with the union throughout this process to ensure adherence to tripartite guidelines, and that fair compensation is provided to affected employees in line with the company and union's collective agreement.