In a recent development, multinational giant Nestlé has announced the impending closure of its Askeaton factory located in Ireland. This decision comes in response to a drastic decline in the number of births in China, which has halved since 2018. The facility, operated under the name Wyeth Nutritionals Ireland Ltd, was acquired by Nestlé in 2012.
Nestlé, in a press release issued on Wednesday, revealed that the closure of the Irish factory would lead to the unfortunate redundancy of its 542 employees, who will face unemployment as early as the beginning of 2025.
Furthermore, the company has stated that the Research and Development (R&D) operations previously conducted at the Askeaton facility will be integrated into one of their other R&D centers situated in Konolfingen, Switzerland.
The production previously handled by the Askeaton factory will be distributed between Nestlé’s Swiss location and its factory in Suzhou, Mainland China. Nestlé, however, has been quick to emphasize that this strategic shift is not a reflection of the dedication and hard work of its Askeaton workforce over the years.
The primary catalyst for this decision is the dramatic decrease in demand for instant formula in Greater China and Asia, regions to which all of the Askeaton factory’s production was exported. In 2022, China’s birth rate plummeted to its lowest level since 1949, with a mere 9.56 million babies born. Additionally, China’s population began to shrink for the first time in decades.
China’s birth rate, with a mere 1.09 births per woman, has consistently been lower than that of European Union countries since 2019. This decline in births naturally leads to reduced demand for infant formula. However, Nestlé also cites a growing preference for locally-produced powdered milk in the region, with the company stating, “In 2008, a melamine crisis impacting local infant formula manufacturers in Mainland China resulted in eroded consumer confidence in locally produced products.” Since then, efforts by Chinese authorities to restore confidence have significantly boosted the sales of locally-produced formula.
