Abbott shuts down infant formula production for the second time during formula shortage crisis
16 Jun 2022 --- Abbott has stopped producing EleCare specialty formula at its Sturgis plant in Michigan, US, after parts of it were flooded following heavy thunderstorms. The move will delay production for weeks at a time when the country is grappling with a nationwide shortage.
“We have informed the US Food and Drug Administration (FDA) and will conduct comprehensive testing in conjunction with the independent third party to ensure the plant is safe to resume production. This will likely delay production and distribution of new products for a few weeks,” says the company.
At the same time, the FDA announced Mead Johnson Nutrition/Reckitt would be exporting 4.5 million pounds of base powder from Singapore this month. The product will be used to produce about 5.7 million cans of formula, amounting to more than 66 million full-size, 8-ounce bottles.
The base powder will be used to manufacture Enfamil Stage 1 at a Minnesota facility. Monthly follow-on shipments will continue through November. The US Department of Health and Human Services is evaluating options for getting the product to the US as quickly as possible.
Reaping the profits
Importing the item from Singapore serves the goal of feeding “211,000 more babies than before the shortage,” Reckitt specifies.
The company is also securing additional manufacturing inputs and capacity from its Delicias, Mexico facility. Reckitt explains it is taking additional measures to supply the US market, including operating its plants 24 hours a day and maximizing production capacity by streamlining the product portfolio.
As part of the US government’s move to shore up supplies of dwindling infant formula, President Joe Biden recently announced Operation Fly Formula, loosening regulations on importing infant formula from abroad.
Bubs Australia announced it would supply Walmart with 1.25 million cans of baby formula, leading shares to rise as much as 10.6% in morning trade, valuing the company at about AUS$383 million (US$268.94 million), according to Reuters.
The company last month clinched an agreement with the US to ship 27.5 million bottles of infant formula.
"The addition of Walmart will increase our bricks and mortar exposure in the US over the coming days and weeks to around 4,800 stores across 35 states," underscores Kristy Carr, CEO at Bubs Australia.
The European Union previously announced that they maintained a secure supply throughout the formula shortage to prevent entering a similar situation as the US. However, some manufacturers have exported formulas to the US, for example, UK-based Kendal Nutricare supplying 2 million cans, expected to reach the market in June.
Despite Abbott’s temporary factory shutdown, the company is assuring it has sufficient supply of its specialty EleCare item.
“Based upon historical demand and current projections, Abbott has ample existing supply of EleCare and most of its specialty and metabolic formulas to meet needs for these products until a new product is available. These products are being released to consumers in need in coordination with healthcare professionals,” Abbott outlines.
Torrential storms caused heavy winds, hail, power outages and flood damages, forcing the plant to shut down.
According to the company, Abbott produced 8.7 million pounds of infant formula in June to support and tackle the nationwide formula shortage in the US. This amount represents 95% of what they produced in January this year, before the recall and FDA investigation on their production from Sturgis – the Michigan plant.
Abbott recently restarted their production of infant formulas after the FDA investigation earlier this year concerning Cronobacter sakazakii and Salmonella in their product, which caused illness to four infants and two fatal cases.
Edited by Beatrice Wihlander
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