Written by Richa Naidu and Yadarisa Shabong
Reckitt Plc said Wednesday that short-term sales of some of its Mead Johnson infant formula products are likely to be affected after a tornado hit a third-party warehouse in Indiana, causing extensive damage.
The Mount Vernon warehouse, which is currently out of operation after being hit by a tornado on July 9, is a critical site for Mead Johnson Nutrition that houses both raw materials and finished products, Rickett said.
The company said all its employees are safe, adding that it has diverted all incoming deliveries to other storage facilities in the United States.
A Reckitt spokesman said some types of food products were likely to be affected in the short term.
“We are working with customers and suppliers on rapid recovery efforts to minimize disruption by leveraging our global supply chain and managing inventory in our other U.S. warehouses,” they added.
The company said Reckitt has comprehensive insurance against property damage and business interruption, which it expects to largely offset the impact on earnings.
This marks the third piece of bad news the company has shared this year.
In February, an investigation showed that some employees had not reported their financial obligations in the Middle East, as stocks recorded their biggest one-day drop since December 1999.
Just a month later, the stock fell again after an Illinois jury ordered Reckitt Mead Johnson to pay $60 million to the mother of a premature baby who died of an intestinal illness after being fed a single product of the company’s Enfamil brand of infant formula.