Abbott Laboratories plans to spend half a billion dollars to build a new baby-formula plant, in light of a shortage that was touched off by problems at its existing one.
CEO Robert Ford announced during an investors’ call that Abbott will build a new plant, at a location yet to be determined, for an estimated $500 million. “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,” Ford said in remarks quoted by CNN.
Ford also said that its plant in Sturgis, Mich., resumed production of “some Similac products” last month and that they should reach retail shelves “over the coming weeks.” He said that there have been changes in leadership at the plant and in the company’s quality-control operations, although he did not specify them.
The Sturgis plant was shut down in February after two infants died following consumption of formula produced there, and an FDA inspection revealed unsanitary conditions (although no definitive link with the deaths was ever established). It reopened in June, only to close again after taking in water from widespread flooding in the area.
The problems at Sturgis started a nationwide shortage of baby formula that is still ongoing, with 40% of parents saying in a U.S. Census Bureau survey that they had less than a week’s supply on hand and nearly a third reporting trouble finding formula in stores.
