Reckitt says baby formula plants in Singapore and Mexico can produce 21 million bottles for U.S. if FDA approves

Baby formula manufacturer Reckitt has the capacity to produce at least 21 million 8-ounce bottles of infant formula at its plants in Asia and Latin America for the U.S. market if the Food and Drug Administration gives it the green light, a senior company executive said Wednesday.

Parents have struggled to find food for their infants after Abbott, previously the largest formula manufacturer in the U.S., was forced to close its plant in Sturgis, Michigan, and recall several batches of formula in February due to bacterial contamination at the facility.

Reckitt has become the dominant manufacturer in the U.S. with a 54% market share since the closing of the Abbott factory, according to Robert Cleveland, the head of Reckitt's infant formula operations in North America and Europe. After a ramp-up in U.S. production, Reckitt has shipped 35% more formula to stores through April compared with the year-earlier period, the equivalent of feeding an additional 200,000 infants, Cleveland said.

Reckitt also has the materials in place and is ready to start production at its Singapore plant for the U.S. market on June 5, according to Cleveland. The company can initially produce 200 metric tons of formula, the equivalent of 6 million 8-ounce bottles, in Singapore and have the product on the shelves in the U.S. later this month. Reckitt can then ramp up to deliver 500 metric tons from Singapore to the U.S., Cleveland said.

If the FDA allows Reckitt's plant in Mexico to ship to the U.S. as well, the company can move at least 700 metric tons of formula — or the equivalent of 21 million 8-ounce bottles — to the U.S. market from Singapore and Mexico combined, Cleveland said. An 8-ounce bottle amounts to one feeding for an infant.

"We're literally waiting here by the hour for the FDA to tell us to go ahead, and if they do — we're ready to run," Cleveland told CNBC. "We think we can substantially fix this problem in the U.S. on our manufacturing alone."

The FDA has eased baby formula import restrictions in response to the shortage, asking manufacturers to submit applications to ship formula produced for foreign markets to the U.S. The FDA declined to comment specifically on the status of Reckitt's application to bring product into the U.S. from Singapore and Mexico. However, a spokesperson said the FDA is working as quickly as possible to review requests from companies to import infant formula.

"This includes a review of information pertaining to nutritional adequacy and safety, including microbiological testing, labeling, and additional information about facility production and inspection history," the spokesperson said. "The FDA will continue to use this information to consider on a case-by-case basis opportunities to exercise enforcement discretion."  

President Joe Biden met virtually with executives from the infant formula industry, including Cleveland, Wednesday afternoon to discuss U.S. efforts to end the shortage. The Biden administration has flown in 1.5 million 8-ounce bottle of infant formula made by Nestle from Europe, with additional flights scheduled next week to pick up millions more bottles from the manufacturers Bubs Australia and Kendamil in the United Kingdom.

The Biden administration has also invoked the Defense Production Act to support increased production of infant formula in the U.S. Cleveland said supply chains in the industry have faced persistent problems with input shortages and delivery delays due to the Covid-19 pandemic.

One of Reckitt's suppliers recently had trouble delivering enough oil used in formula products because they couldn't get a part used in their production line. The administration used the DPA to help the supplier get that part, and the company was then able to deliver the oil to Reckitt, Cleveland said. The administration has also made calls to suppliers to facilitate more consistent trucking schedules, he said.

The U.S. formula shortage likely will not end until late summer, Cleveland said, though that timeline does depend on when Abbott's Michigan plant starts production again and whether the FDA greenlights Reckitt's foreign formula.

Abbott has said it aims to restart production in Michigan on June 4, though it will take six to eight weeks for its formula to reach store shelves. The Michigan facility shut down in February after four infants who consumed powdered formula made at the plant were hospitalized with Cronobacter bacterial infections; two of those infants died.

FDA Commissioner Dr. Robert Califf told Congress last week that the FDA and the Centers for Disease Control and Prevention couldn't prove a link between the infant illnesses and Abbott's baby formula products. However, inspectors found "egregiously unsanitary" conditions at the Michigan plant, Califf said.

Abbott is required to take hundreds of steps under a consent decree backed by a federal court to ensure the Michigan plant meets U.S. food safety standards before it can reopen.