Abbott Nutrition Chairman and CEO Robert Ford revealed on Wednesday, October 19, plans to build a $500 million nutrition facility for metabolic and specialty infant formulas, CNN reported. The major announcement comes as the formula shortage in the United States continues with experts calling for more domestic production and diversity among suppliers.
Ford told investors on a call that they are moving forward with plans for a half-billion-dollar investment in a new nutrition facility in the U.S. for specialty and metabolic infant formulas. He added that they are currently in the final stages of determining the site location and they will work with experts and regulators to ensure that this facility is state-of-the-art and sets a new standard for infant formula production.
Ford said they recognize that there is more to do but they feel confident in the progress they are making. The shutdown of the company's formula plant in Sturgis, Michigan, and the recall of some of Abbott's products exacerbated an infant formula shortage that is still causing problems for American families across the United States.
Baby formula shortage still a problem for some American families
The US Census Bureau recently conducted a survey, finding that nearly a third of households with a baby younger than the age of 1 had trouble finding formula over the course of a week last month. More than 40 percent said that they had only a week's supply of formula or less on hand.
After being closed for several months, Abbott's Sturgis facility reopened in June with the production of EleCare specialty formula. Operations were underway for less than two weeks before weather-related flooding prompted another closure in the plant. The Michigan facility reopened again in July, according to Reuters.
Ford said that they began production in September of several Similac products, which they expect will begin to reach retail store shelves over the coming weeks. He added that they also boosted production in their global network to increase infant formula supply to the U.S. He said that they delivered roughly the same volume of formula to their American customers this past quarter as they did during the three months prior to the recall.
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FDA acknowledges delays in its response to formula shortage
The U.S Food and Drug Administration (FDA) conducted an internal review of its formula shortage response, with the federal agency finding a perfect storm of systemic vulnerabilities that slowed its response to the shortage, according to NBC News.
FDA Commissioner Dr. Robert Califf said that manufacturers have stepped up production but the supply chain needs greater diversity of manufacturers and a commitment by formula companies to adhere to the safety and quality standards of the agency.
Califf said in an interview last month that the situation at Abbott's Sturgis facility has highlighted just how little authority the agency has to compel many companies to do the right thing without intervention.
