A tornado has caused significant damage to a warehouse in Mount Vernon, Indiana, used by Reckitt for its baby food products in the US.
The tornado struck the warehouse on 9 July, which is a crucial site for Reckitt’s Mead Johnson Nutrition business.
Reckitt’s nutrition business, including its Mead Johnson infant nutrition subsidiary, manufactures the US baby food brands Enfamil and Nutramigen.
The warehouse in Mount Vernon houses a mix of raw materials and finished products.
The extreme weather event resulted in significant damage at the production site, but fortunately, no employees were harmed.
Reckitt gained partial access to the damaged plant on 13 July and has suspended operations since then, diverting all scheduled deliveries to other US warehouses.
In a statement, Reckitt mentioned that it anticipates a “short-term” impact on its nutrition sales due to the damage.
The company is working closely with all stakeholders, including customers and suppliers, to minimize disruptions by leveraging its global supply chain and managing inventory at other North American Nutrition warehouses and with retail partners.
Reckitt also stated that it has comprehensive property damage and business interruption insurance, which is expected to offset most of the impact on earnings.
An update on the impact of the tornado damage will be provided along with Reckitt’s half-year results on 24 July.
This supply chain disruption adds to the challenges faced by Reckitt’s baby food business.
Earlier this year, Reckitt was involved in a legal case where a jury awarded damages to the mother of a baby who died after consuming Enfamil Premature 24 infant formula.
In a separate incident, the company initiated a recall of Mead Johnson’s Nutramigen Powder due to possible contamination from the Cronobacter sakazakii bacteria.
This recall extended to the UK as well, following tests that showed negative results for the pathogen.
Reflecting on the situation, Reckitt mentioned that it is focusing on navigating the litigation and remains confident in prevailing due to clear scientific evidence.
In the midst of these challenges, CEO Kris Licht addressed speculation about a potential spin-off for the Mead Johnson business, stating that it is not prudent to discuss structural changes at the moment.
