Japan-based Yakult Honsha is closing a factory in China as part of changes to try to make its local business more competitive.
Yakult will dissolve Shanghai Yakult, a wholly owned subsidiary of Yakult China, which handles manufacturing and sales.
The sales division will be transferred to a newly established branch in Shanghai under Yakult China.
Under the plan, the operations of the Shanghai factory will be relocated to plants in Wuxi and Tianjin.
In a statement, Yakult said it is aiming to “improve management efficiency” through the changes.
The Shanghai factory has been operational since 2006, is one of Yakult’s seven production sites in China, with a capacity of approximately 16 million bottles, according to Shine, an online service backed by Shanghai Daily.
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Yakult began local production in China in 2002 at a factory in Guangzhou. It entered the Shanghai market in a year later.
The new Shanghai branch will gradually begin selling products in supermarkets and through the Yakult Ladies home delivery service.
Yakult said “there has been no change” to its “policy of continuing with the Chinese business nor its aim to further develop the business there”.
It added that “realising efficient operation and business expansion through consolidation of resources”, were seen as the “best” way for further growth in the country.
The impact of the decision in the fiscal year ending 31 March 2025 is expected to be “negligible”, as Yakult China assumed the sales division, the probiotic drink maker said.
For the six months ending 30 September 2024, Yakult’s net sales reached Y255bn ($1.67bn), a slight increase from Y252.8bn in 2023.
Operating profit was Y33.7bn, with the margin improving from 13.2% to 14%.
