The company said in a statement Thursday t
hat Salmonella Agona was found in one of the drying towers at the plant in north-western France.
It's the same strain linked to an outbreak in 2005, and the company said cases of contamination since then may have been possible.
"It can not be ruled out that babies have consumed contaminated milk during this period," Lactalis CEO Emmanueal Besnier told French news outlet Les Echos
On January 12, the company recalled
all baby milk powder and cereals produced at the plant while it investigated the source of the contamination.
It followed an earlier recall in December,
ordered after 26 infants fell ill with salmonella poisoning in France. The products were sold in as many as 83 countries including China, Greece, Pakistan and Peru.
Crisis will cost company millions
In its statement, the company said that the recent contamination "can by explained by successive periods of works starting at the beginning of 2017 to take down partitioning walls and perform floor repairs in the building."
It said while the bacteria was present it had been contained "due to the sanitary barriers and the procedures that are put in place."
Besnier said that, following the contamination, quality controls for the baby powder would be strengthened. He added that the crisis will cost the company "hundreds of millions" of euros.
"We will greatly strengthen our infant formula inspection programs," he said, adding that the tests will be backed up by a second laboratory.
Besnier has promised to compensate families of infants who were affected by tainted products, which he said amounted to 35 babies, in France and abroad.
Tower to be shut
There are two towers at the Craon site, and Lactalis stressed that the issue only applied to Tower 1, which will be shut down.
The company said it had no intention of withdrawing from the infant milk market and plans were underway to build a new facility.
It said it was still trying to determine why 16,000 tests performed on finished products in 2017 failed to detect contamination in products made at the facility.
"If the analyzes on finished products had revealed the presence of Salmonella Agona, it is certain that we would not have distributed the products and would have avoided the crisis," the company said.
Lactalis, the "number one dairy company in the world," according to its website, produces some of the world's most recognizable dairy products and brands, including President and Galbani. The Lactalis Group employs 75,000 people in 44 different countries around the world, its website says.