Abbott to build $270m nutrition manufacturing facility in Ohio

By Elaine Watson

- Last updated on GMT

Related tags: Nutrition

Abbott to build $270m nutrition manufacturing facility in Ohio
Abbott Nutrition has unveiled plans to build a $270m nutrition manufacturing facility in Tipp City, Ohio, to make liquid nutrition products Ensure and Glucerna for the North American market.

Building work on the facility, which will employ approximately 240 people, is expected to start in April with the plant becoming operational in late 2013.

A spokesman told NutraIngredients-USA that the site would focus on the production of Glucerna and Ensure, but would also have the capability to make additional products.

Both brands generated double digit growth in 2011, he added.

“This plant will really support future growth.”

He added: “Currently these brands are made in third party facilities.”

Important operational efficiencies

The plant will specialize in aseptic packaging technology, which would enable the firm to expand the use of new ingredients, shorten product development time and reduce energy use during manufacturing, said John Landgraf, executive vice president, Global Nutrition, Abbott.

"As the US population continues to age, particularly baby boomers, this new plant will enable us to meet the fast-growing demand for our leading adult liquid nutrition products, Ensure and Glucerna.

"It will be a key addition to our global manufacturing network that will allow the company to gain important operational efficiencies."

Abbott's nutrition business – based in Columbus, Ohio - is expected to boost sales from $6bn in 2011 to more than $9bn by 2015, said the firm.

“This growth is supported by attractive pediatric and adult nutrition market fundamentals, increasing global awareness of the importance of nutrition to overall health and well-being, and the rise of an emerging-market middle class.”

Sales in nutritionals set to rise from $6bn in 2011 to $9bn in 2015

Parent company Abbott, which recently announced plans to separate into two publicly-traded companies, posted an 8.6% rise in sales to $6bn in its global nutritionals division in 2011 driven by strong sales in emerging markets and gains in the US infant formula market.

Speaking on a conference call with investors and analysts in January, chief executive Miles White said the nutritionals business was set to grow in the high single digits in 2012.

“For full year 2012 in the global nutritionals business, we are forecasting high single digit reported sales growth including mid-single digit growth in our US business and low double-digit reported growth for our international nutritionals business”

Asked about longer-term prospects for infant nutrition, he added:“We have regained all the share impacted by the recall and we’ve done a nice job relative to the competition.

“But the US market for infant nutrition is slightly declining, at least[it has been]in the last couple of years. But the growth profile overseas will improve… particularly in emerging markets.

Corporate re-engineering

While there was still “significant work to do”to prepare for the split, Abbott remained “on track to complete the separation by the end of 2012”,said White.

"2011 was a significant year for Abbott, with the announced plan to separate into two leading health care companies in research-based pharmaceuticals and diversified medical products, each offering shareholders distinct identities with unique investment opportunities.”

Breaking up its business into an $18bn research-based drugs division (which makes anti-inflammatory drug Humira and cholesterol-lowering drug Niapan) and a $22bn diversified medical products division (which makes generic drugs, medical implants, diagnostic tests drugs and nutritional products) made sense, said White.

“These two investments make sense separately and both are of a critical mass and size that they have great sustainability going forward as independent companies.

Nutritional division areas of focus in 2012

Abbott’s focus for new product development in nutritionals will be on six areas this year: Cognition, immunity, lean body mass, inflammation, metabolism, and tolerance.

In a conference call with analysts in October, White said the Nutritionals business – which includes sports nutrition brands EAS Myoplex and AdvantEGDE, weight management brands Zone Perfect and Glucerna and infant nutrition brand Similac – would launch a ‘cadence of new products’ in 2012.

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