Abbott closing one plant to open another

Health care and medical research company Abbott China is closing its nutritional products manufacturing plant in Guangzhou and is expected to launch a new factory in Jiaxing of Zhejiang in the second half of this year.

"China continues to be a priority for Abbott. As a result, we will be closing our manufacturing plant in Guangzhou China. Our manufacturing facility in Jiaxing will open later this year," the company said in an e-mail.

"We are in the final phases of completing the new manufacturing facility and are looking forward to expanding our production capability and capacity in China. We expect the state-of-the-art facility to open later this year. We are not providing additional details at this time," the e-mail said.

Abbott's nutritional products include infant formula.

In 2013, the China Food and Drug Administration issued new regulations for the production of formula, raising the bar for milk powder production with rules that reach raw materials, recipes, production techniques, procedures and facilities.

All infant formula producers must obtain new permits by the end of May or face a two-year suspension of production.

About one-third of the small and mid-sized dairy producers won't be able to get new permits, which means more factories are expected to close, according to industry analysts.

Abbott acquired the Guangzhou production plant from Fonterra in 2007.

The nutrition section of Illinois-based Abbott has first-quarter sales in 2014 of $1,631 million, of which $942 million was from international sales.

In 2014, Abbott expects to increase its global capacity to meet demand with three new manufacturing facilities scheduled to come on line in China, India and the US in the second quarter.

The company said it is on track to achieve an operating margin of ore than 20 percent by 2015.