Amid shortages and another recall, Abbott plans $500 million infant formula plant

Abbott plans to build a $500 million infant formula facility and is boosting production at other plants as the health care company looks to increase supply in the U.S. amid ongoing shortages.

"We're currently in the final stages of determining the site location and will work with regulators and other experts to ensure this facility is state-of-the-art and sets a new standard for infant formula production," Robert Ford, the company's chairman and CEO told investors in an earnings call on Wednesday.

The decision to invest in a new plant comes in response to an analysis that found "this country would benefit from more manufacturing capacity and redundancy," Ford said. 

Many parents have faced persistent shortages of baby formula that started in February when Abbott temporarily closed its biggest plant in Sturgis, Michigan, and recalled several leading brands of formula, including Similac. 

The plant closure came alongside a federal probe of four bacterial infections among infants who consumed powdered formula from the plant, with two children dying. The company said its products have not been directly linked to the infections, which involved different bacterial strains.

FDA inspectors eventually uncovered a host of violations at the plant, including bacterial contamination, a leaky roof and lax safety protocols. Production at the Sturgis plant resumed in July, but Abbott's hiccups related to baby formula have continued.

Abbott last Friday recalled some formula for infants and kids because the bottles may have defective caps and not seal completely, possibly leading to spoilage. The latest recall is relatively small and shouldn't spark a repeat of the widespread shortages of baby formula endured earlier this year, the company said.

"This recall equates to less than one day's worth of the total number of ounces of infant formula fed in the U.S. and is not expected to impact the overall U.S. infant supply," according to Illinois-based Abbott, the largest U.S. formula manufacturer.

The recall is for certain lots of 2 fluid ounce/59 milliliter bottles of Ready-to-Feed liquid products for infants and children. The formula could cause diarrhea and vomiting if consumed, Abbott said.

Made at Abbott's manufacturing plant in Columbus, Ohio, the recalled brands include Similac Pro-Total ComfortTM, Similac 360 Total Care, Similac 360 Total Care Sensitive, Similac Special Care 24, Similac Stage 1, Similac NeoSure, Similac Water (sterilized) and Pedialyte Electrolyte Solution.

Beyond increasing production throughout its global network, Abbott continues to produce Similac products for hospitals and other health care providers on a different production line, and the infant formula is still for sale at retail stores in alternative product sizes, the company said. 

The recalled products were primarily distributed to hospitals, doctors' offices and retailers in the U.S., including Puerto Rico. One lot was sent to Barbados, Bermuda, Colombia, the Dominican Republic, Haiti, Jamaica, St. Croix and St. Thomas; and two lots were sent to Canada, Curacao, Panama, and Trinidad and Tobago.

Customers who may have bought some of the recalled formula should not use it and instead visit similacrecall.com to view a list of the impacted lot numbers or use the lot number checker on the website.