Nestlé has announced plans to close a baby formula plant in Ireland due to a significant drop in China’s birth rate, shedding light on the far-reaching consequences of China’s demographic challenges.
The Wyeth Nutrition infant formula factory in Askeaton, Ireland, will be shut down by the first quarter of 2026 unless a buyer can be found.
The plant exclusively manufactures infant formula products for export to Asian markets.
This development illustrates how China’s declining population can impact Western companies that trade in the country.
China’s aging population is already affecting its economic growth, and policymakers are concerned that a shrinking workforce could pose long-term threats to economic and social stability.
Nestlé explained, “the number of newborn babies in China has declined sharply from some 18 million per year in 2016 to fewer than 9 million projected in 2023. The market, which had previously been reliant on imported infant formula products, is also seeing rapid growth in locally produced products.”
A Nestlé research and development center at the plant will close a year earlier, with operations shifting to existing factories in China and Switzerland.
The closures put 542 jobs at risk, and Nestlé has initiated a “consultation process” with employees. The company also expressed willingness to consider offers from credible buyers.
Nestlé’s global sales have been impacted this year by rising product prices, including popular items like Nescafé coffee and KitKat chocolate bars.
The company reported sales growth in the first nine months of the year, which fell short of analyst expectations, leading to a more than 2% drop in its shares.
On a like-for-like or “organic” basis, sales grew 7.8% compared to the previous year, with prices rising by 8.4%.
However, total sales, on a simpler measure, decreased by 0.4% to 68.8 billion Swiss francs ($76.6 billion).
Additionally, Nestlé temporarily closed a factory in Israel as a precaution but has since resumed operations at the facility.
Source-CNN
