Chinese milk company's melamine history

Yashili International, the Chinese company with plans to build a milk processing plant in New Zealand, continues to shrug off the 2008 melamine scandal.

Its plan to build a $210 million milk processing plant in the Waikato town of Pokeno follows a major shift in its business model after the food-poisoning scandal in China, in which tainted milk killed at least six infants and 300,000 more became sick.

Yashili was one of 22 milk producers in China, including former Fonterra subsidiary Sanlu, which failed a government test in 2008 screening for melamine, business editor Duncan Bridgeman reports in today's new-look print edition of the National Business Review.

The incident cost Yashili 787 million yuan ($NZ150 million) that year, including inventory writedowns and compensation payments.

The Zang-family owned company maintains it did not add melamine to its products and blames raw milk dealers for the catastrophe.

Most of Yashili's raw material is now sourced from New Zealand.

A 2010 prospectus mentions a handful of lawsuits against Yashili and those launched by the company against suppliers it claims provided contaminated dairy materials.

Its Waikato factory plans are subject to Overseas Investment Office approval.

Also in today's new-look print edition, Kiwi brand Watties-Heinz uses a local Chinese celebrity in TV advertisements to try and lift sales of its Nurture toddler formula among Chinese-speaking households.

Elsewhere, New Zealand Institute of Building Surveyors president Philip O'Sullivan says the government needs to enact a national home warranty scheme, run by the industry on a non-profit bases, to help solve the leaky homes crisis.


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