Abbott plans new $500 million infant formula facility as shortage continues
(CNN) -- Abbott Nutrition plans to build a $500 million nutrition facility for specialty and metabolic infant formulas, Chairman and CEO Robert Ford said Wednesday. The announcement comes as the US formula shortage continues and experts have called for more domestic production and diversity among suppliers.
"We're moving forward with plans for a half-billion-dollar investment in a new US nutrition facility for specialty and metabolic infant formulas," Ford said on a call with investors. "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. We recognize there's more to do but feel confident in the progress we're making."
The shutdown of Abbott's formula plant in Sturgis, Michigan, and the recall of some of its products exacerbated an infant formula shortage that is still causing problems for families across the country.
A survey conducted by the US Census Bureau found that nearly a third of households with a baby younger than 1 said they had trouble finding formula over the course of one week last month. More than 40% said they had only a week's supply or less on hand.
After being closed for months, Abbott's Sturgis plant reopened in June with production of EleCare specialty formula. That was underway for less than two weeks before weather-related flooding prompted another closure. It reopened again in July.
"In September, we began production of several Similac products, which we expect will begin to reach retail store shelves over the coming weeks," Ford said Wednesday. "We also boosted production in our global network to increase infant formula supply to the US. In fact, we delivered roughly the same volume of formula to our US customers this past quarter as we did during the three months prior to the recall."
The US Food and Drug Administration's internal review of its formula shortage response, released in September, found a perfect storm of "systemic vulnerabilities" that slowed its response. Commissioner Dr. Robert Califf said at the time that manufacturers have stepped up production, but the supply chain needs greater diversity of manufacturers, a commitment by companies to adhere to the agency's safety and quality standards, and new production facilities.
"The situation at the Abbott Sturgis facility has highlighted just how little authority the FDA has to compel many companies to 'do the right thing' without intervention," Califf said last month.
Ford said on Wednesday's call that the company's plans for a new facility are in response to its own analysis of the formula market that "concluded that this country would benefit from more manufacturing capacity and redundancy."
Ford also said Abbott has concluded an investigation into allegations made by a former employee, who filed a complaint with the US government in February 2021 that reported falsified records and concerns about safety and quality.
"The investigation, which included extensive document reviews and interviews, concluded that the allegations about quality were unfounded. And during the quarter, the same former employee dropped the federal OSHA complaint," Ford said.
CNN has reached out to the US Department of Labor's Occupational Safety and Health Administration for comment.
