Abbott Nutrition plans to invest $500 million to build a nutritional facility for special infant formulas and formulas, Chairman and CEO Robert Ford said Wednesday. The announcement comes at a time when US formula shortages continue, with experts calling for more domestic production and diversity among suppliers.
“We are moving forward with plans to invest $500 million in a new U.S. nutrition facility for specialty infant formulas and metabolic formulas,” Ford said on a conference call with investors. “We are currently in the final stages of determining the site location and are working with regulators and other experts to ensure that this facility is state-of-the-art and sets new standards in infant formula production. We recognize that there is still work to be done, but please be confident in the progress we are making.”
The closure of Abbott’s formula plant in Sturgis, Michigan, and the recall of some of its products, exacerbated shortages of infant formula that continue to cause problems for families across the country.
According to a survey conducted by the U.S. Census Bureau, nearly a third of households with babies under the age of one said they had trouble finding formula in the last week. Over 40% say they have less than a week’s worth of inventory for her.
Abbott’s Sturgis plant resumed production of EleCare specialty formulas in June after being closed for several months. It was underway for less than two weeks before weather-related flooding caused another closure, and it reopened in July.
Ford said Wednesday, “In September, we began production of several Similac products, which we expect to begin hitting retail shelves in the coming weeks.” We ramped up production in our global network to increase the supply of infant formula to our customers in the US in the quarter, and in fact, we delivered roughly the same amount of formula to our U.S. customers this quarter as we did in the three months prior to the recall.”
An internal review of the U.S. Food and Drug Administration’s response to the formula shortage, released in September, found a complete storm of “systemic vulnerabilities” that slowed the response. He said manufacturers are stepping up production, but supply chains need more diversity from manufacturers, a company’s commitment to comply with the agency’s safety and quality standards, and new production facilities.
“The situation at the Abbott Sturgis facility highlights how little power the FDA has to force many companies to ‘do the right thing’ without intervention,” Calif said last month.
Ford said in a call Wednesday that its plans for the new facility corresponded to its own analysis of the formula market, which “concluded that the country would benefit from more manufacturing capacity and redundancy.” .
Ford also said Abbott closed an investigation into allegations by a former employee who filed a complaint with the U.S. government in February 2021 for reporting falsified records and safety and quality concerns.
“An investigation, including extensive document review and interviews, concluded that the quality allegations were unfounded. Also during the quarter, the same former employee withdrew his federal OSHA complaint.” Mr Ford said.
CNN reached out to the U.S. Department of Labor’s Occupational Safety and Health Administration for comment.
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