Japan-based Yakult Honsha is set to close its factory in China. This decision is part of strategic changes aimed at enhancing the competitiveness of its local operations.
Yakult plans to dissolve Shanghai Yakult, its wholly owned subsidiary responsible for manufacturing and sales.
In this restructuring, the sales division will transition to a newly established branch in Shanghai under Yakult China.
The production activities of the Shanghai factory will relocate to other facilities in Wuxi and Tianjin.
In a recent statement, Yakult emphasized that the changes aim to “improve management efficiency.”
Since opening in 2006, the Shanghai factory has served as one of Yakult’s seven production facilities in China, boasting a capacity of approximately 16 million bottles, according to Shine, an online service supported by Shanghai Daily.
Yakult’s local production in China began in 2002 at a factory in Guangzhou, followed by its entry into the Shanghai market in 2003.
The new Shanghai branch will progressively commence sales in supermarkets and leverage the Yakult Ladies home delivery service.
Yakult reassured stakeholders that “there has been no change” in its “policy of continuing with the Chinese business nor its aim to further develop the business there.”
The company stated that “realizing efficient operation and business expansion through consolidation of resources” is deemed the “best” path for future growth in the region.
Yakult anticipates the fiscal impact of this decision in the year ending 31 March 2025 will be “negligible,” as Yakult China assumes the sales division.
For the six months concluding on 30 September 2024, Yakult reported net sales of ¥255 billion ($1.67 billion), a minor increase from ¥252.8 billion in 2023.
Operating profit stood at ¥33.7 billion, with margins improving from 13.2% to 14%.
