Abbott Nutrition said it plans to build a new $500 million facility for specialty and metabolic infant formulas, amid calls from advocates and experts that there needs to be more domestic manufacturing and diversity in the supply chain.
The company in an earnings call said it also made leadership changes at its Sturgis, Michigan baby formula manufacturing plant as well as in its quality organization, following a shutdown and nationwide recall that exacerbated formula shortages nationwide.
“We’re moving forward with plans for a half-billion-dollar investment in a new US nutrition facility for specialty and metabolic infant formulas,” company chairman and CEO Robert Ford said on an earnings call with investors Wednesday.
“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 manufacturing plant in Sturgis was shut down in mid-February following an FDA inspection that found unsanitary conditions and multiple strains of a bacteria that can be deadly to infants.
Just four companies are responsible for 90 percent of the formula market. When Abbott’s plant shut down, the effects cascaded down a supply chain that was already strained because of the pandemic. The shortages sent parents, and the Biden administration, scrambling.
The company said its products have not been directly linked to the infections.
Production at the Sturgis plant resumed in July, but the supply is still not back to pre-pandemic levels.