Oatly inaugurates new production facility in China to take advantage of robust demand for faux dairy

CHINA – Swedish alternative dairy company Oatly has opened its first manufacturing facility in China, as it looks to expand its production capacity in Asia. 

The Swedish oat milk giant described the new factory as part of its “wider initiative to build factories fit for the future” and to meet growing demand across Asia.   

The facility which is located in Ma’anshan, Anhui province has the potential to produce an estimated 150 million litres of oat-based products annually at full capacity. 

“Oatly has grown to be the leader of the plant-based milk category in China and around the world, enabling people to switch from cow’s dairy to oat drink,” said Oatly CEO, Toni Petersson. 

“We are confident in the continued growth of the Chinese market and that the new Chinese factory will accelerate our mission to drive a societal shift towards a plant-based food system for the benefit of people and the planet”. 

The opening comes just a few months after Oatly – which claims to have established a new Chinese character for ‘plant-based milk’ – inaugurated its first Asian factory in Singapore. 

David Zhang, Asia president of Oatly, said: “Following the debut of our first factory in Asia, in Singapore this July, the opening of the first factory in China provides more capacity for Oatly in Asia, supporting the global expansion and meeting the increasing market demand”. 

“With the opening of this new factory, we are extending the world-class oat drink production process from Sweden to China, making plant-based diets accessible to more people to address the climate challenges that mankind faces.” 

Driven primarily by food safety and health concerns, Chinese consumers have been gradually opening up to alternative proteins.  

One report identified China as one of the biggest growth drivers of the alternative protein industry in the coming years, with demand set to surge by 200% within five years.   

The Ma’anshan factory with support from  Oatly’s Singapore plant operated in partnership with Yeo’s will be critical for Oatly as it seeks to capitalize on this rising demand. 

Oatly’s latest news comes after it experienced a rocky week in the stock market, with its shares plunging nearly 20% after news of its revised sales guidance and delays in orders were revealed.   

The share plunge was also catalyzed by Oatly’s revelation that it was “investigating a quality issue” which might force it to bin some products.  

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