Oatly Reassesses Its China Strategy

China 31.07.2025

Source: DairyNews.today

Swedish plant-based food producer Oatly has begun re-evaluating its operations in China. The company announced it is considering “a range of options” for its future development in the Chinese market, including possible changes to its asset ownership structure—particularly regarding its factory in eastern China.

In an official statement released on July 23, Oatly explained that the strategic review may involve spinning off its Greater China business into a separate entity. According to company leadership, this move could accelerate growth and enhance shareholder value. No timeline has been set for completing the review.

Earlier, in February 2025, Oatly canceled plans to build a second production facility in China, stating that the current plant in Ma'anshan, which opened in 2021, was sufficient to meet existing demand.

In 2024, revenue fr om the China segment totaled $114.9 million, down from $124.7 million the previous year. However, EBITDA losses for 2024 were significantly reduced to $31.1 million, compared to $65 million in 2023, indicating a marked improvement in operational efficiency.

The announcement of a strategic review coincided with the release of Oatly’s financial results for the first half of 2025. Notably, the company revised its global revenue growth forecast: it now expects flat to 1% growth at constant currency, down from a previous estimate of 2–4%. This adjustment is attributed to weaker-than-expected conditions in North America, while the situation in China has proven more stable.

Despite the revised outlook, Oatly has maintained its full-year 2025 target for adjusted EBITDA in the range of $5–15 million. In comparison, the company reported an adjusted EBITDA loss of $35.3 million in 2024.

CEO Jean-Christophe Flatin highlighted significant progress in executing the company’s priorities during the first half of 2025. He emphasized efforts to optimize logistics costs, reduce overhead, and the success of growth strategies in Europe and international markets, wh ere revenue continues to expand.

In the first half of 2025, Oatly's total revenue grew by 1.1%, reaching $405.9 million. Sales in North America declined by 8.7%, while China recorded a 12.5% increase. The Europe and International business unit also posted positive results, with revenue rising by 4.6%.

EBITDA loss for the first six months of 2025 was $17.2 million, significantly improved from $42.2 million in the same period of 2024. The net loss attributable to the company’s shareholders totaled $68.3 million, compared to $76.2 million in the first half of 2024.