DUBLIN — Private label manufacturer Perrigo Company PLC is investing a total of $170 million into expanding its US infant formula production capacity.
As part of its new strategic investment plan, Perrigo purchased Nestle SA’s Gateway formula plant in Eau Claire, Wis., in addition to the US and Canadian rights for the Good Start formula brand.
“The purchase and expansion of Gateway is the first major initiative in our recently announced supply chain reinvention program,” said Murray Kessler, president and chief executive officer of Perrigo. “It solidifies our long-term manufacturing supply of infant formula in the US, increases the availability of lower priced, high-quality infant formula to consumers and delivers value to Perrigo shareholders.”
Perrigo plans to immediately invest $60 million of the $170 million into the Gateway plant, increasing its production capacity from 29 million lbs annually to 36 million lbs annually. The company also will invest an additional $20 million into its existing facilities in Vermont and Ohio.
The company said the new capacity will allow Perrigo to address the demand for its 17 store brand customers that sell infant formula at approximately a 50% discount to major national brands. The company had been unable to fully meet the demand with its contract manufacturing customers. Investments in the Gateway facility also will support the company’s expansion of its newly acquired Good Start brand.
“Long before this year’s infant formula shortage, we had been pursuing options to increase capacity to meet growing demand for our infant formula in the US,” Kessler said. “But this year’s industry shortage galvanized our commitment to not only invest to meet the demand for our store brand and contract customers, but also to help prevent future infant formula shortages.”