Oatly to build plant-based oat drinks factory in UK as Arla Foods proposes closure of creamery site

UK – Swedish vegan brand Oatly has unveiled plans for a new plant-based dairy manufacturing plant in Peterborough at a time when Arla Foods is contemplating closure of its Trevarrian Creamery in Cornwall.

For Oatly, the facility which is expected to be completed in early 2023 and create over 200 jobs would be its first in the United Kingdom.

The company has partnered with food and drink capital investment firm Integrated Food Projects to build its new facility.

The facility,accordin to the Swedish company, will be able to produce 300 million litres of oat drink per year at launch.

It also has capacity to expand to 450 million litres, a move which Oatly says will make it one of the largest plant-based dairy factories in the world.

The facility will feature highly efficient technologies and processes in line with the company’s “fit for the future” goal.

By 2029, the company aims to use 100% renewable energy and decrease its energy consumption and waste by 75% at the factory.

“We look forward to supplying the UK with more oat drink – we’re even more excited to do it in a sustainable way,” said Johan Rabe, Oatly chief supply chain officer.

The expansion follows an announcement by Oatly that it had sold a minority stake in its business for US$200 million to fund its expansion and the inauguration of new production plants.

Arla Foods plant bears the brunt of Covid-19

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As plans gear up for the establishment of the world’s largest plant-based dairy facility at Peterborough; some residents of Cornwall are facing an impending loss of jobs with the planned closure of the Arla Food creamery.

Arla attributed the closure to decreasing volumes at the facility which have worsened following a loss of key own-label cheese contracts and the instability of foodservice amid the pandemic.

The proposal – which is subject to consultation with employees at the site – could result in the closure of the creamery by early summer this year and the loss or relocation of up to 37 jobs.

Trevarrian Creamery produces a range of brie, camembert and other cheeses predominantly under local or own-label retailer brands.

Arla expects to cease supply of these products to customers by summer 2021, as they are unable to be manufactured elsewhere due to their required production process and composition.

If the proposal goes ahead, Arla envisages that the milk from its farmers in the area will instead go primarily to its sites at Taw Valley and Westbury.

Following the closure of the site, Arla will continue to operate 10 production sites in the UK, with a total of 3,300 employees.

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