Oatly Group Inks Manufacturing Partnership With Ya YA Foods

  • Oat drink company Oatly Group AB OTLY and Ya YA Foods Corporation, a contract manufacturer of aseptic food and beverage products, have forged into a long-term strategic hybrid partnership in North America.
  • The announcement is part of Oatly's shift towards an asset-light supply chain strategy.
  • Oatly will continue to produce its proprietary oat base at both its Utah and Texas facilities and will be transferred to Ya YA Foods to be co-packed into Oatly products on-site at each location.
  • As part of the agreement, Ya YA Foods will acquire most of the assets used in operation and assume the property lease at Oatly's production facility in Ogden, Utah and be responsible for the completion of construction of the production facility and the lease in Fort Worth, Texas.
  • Oatly will retain full ownership and operation of proprietary oat base production lines in each facility.
  • Oatly will receive approximately $72 million, plus an additional credit amount towards future use of shared assets related to the Utah facility.
  • The company expects this hybrid partnership to result in future capital expenditure savings and positively affect its cash flow outlook.
  • Price Action: OTLY shares are trading higher by 9.72% at $1.90 on the last check Tuesday.
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