A-Brands

Oatly Announces Hybrid Manufacturing Partnership With Ya YA Foods

By Dayeeta Das
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Oat drinks firm Oatly has announced a long-term strategic hybrid partnership with Canada-based Ya YA Foods Corporation.

The partnership will see Ya YA Foods acquire a majority of Oatly’s assets in North America, including mixing and filling equipment, and assume the property lease at the latter's production facility in Ogden.

It will also assume responsibility for the completion of construction of the production facility and the lease in Fort Worth, Oatly noted.

The move is part of Oatly’s strategy to shift towards an 'asset-light' supply chain to expand its hybrid production network globally to better support its growth, capacity needs and product and format innovations.

It also marks Ya YA Foods’ entry into the US manufacturing market, Oatly added.

Yahya Abbas, CEO of Ya YA Foods, said, "We are pleased that Oatly recognises our top-tier food safety track record and unique capabilities and has confidence in our ability to meet their high standards.

"We expect this transaction to enhance our growth and further strengthen our capabilities: the two properties we are acquiring will increase our geographic profile and scale, allowing us to serve the vast majority of the United States and Canada."

Hybrid Partnership

Through this hybrid partnership, Oatly hopes to achieve future capital expenditure savings and have a net positive effect on its cash flow outlook.

The Swedish oat drinks brand will retain full ownership and operation of proprietary oat-base production lines in each facility.

As part of the transaction, expected to close in the first quarter of 2023, Oatly will receive approximately $72 million and an additional credit amount towards future use of shared assets related to the Ogden facility.

It will also receive additional credit towards ongoing construction at the Fort Worth location.

Toni Petersson, CEO of Oatly, commented, "We are excited to partner with Ya YA Foods, a leading food and beverage manufacturer who brings deep production expertise and shares our commitment to meeting the highest quality product and safety standards.

"We believe an increased focus on our oat-base technology, innovation, branding and commercial execution will better position Oatly to drive profitable growth while reducing the capital intensity of our future facilities, and ultimately convert more consumers to plant-based and create more products that are healthy for people and the planet."

Ya YA Foods is a contract manufacturer of aseptic food and beverage products, including plant-based and high-protein beverages, fruit juices, sports drinks, and broths.

The company provides end-to-end packing solutions to blue-chip food and beverage companies by utilising aseptic and hot-fill processing capabilities for carton and PET bottle packaging.

© 2023 European Supermarket Magazine – your source for the latest A-Brands news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.

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