China's Yashili wins consent for $220m infant formula plant in Pokeno

Company caught up in the 2008 melamine scandal looks to brighten its image.

Chinese company Yashili NZ Dairy Co has won consent to build and run a $220 million infant formula plant in Pokeno.

The land use consent was granted by independent commissioner Michael Savage following a three-day hearing which took place on Wednesday 31 July – Friday 2 August at the Waikato District Council Chambers in Ngaruawahia.

The Council’s Regulatory Committee appointed Michael Savage as the independent Commissioner to hear the application, which received 27 submissions with five submitters heard at the hearing.

Following controversy over the Crafar farms sale, the government encouraged Chinese companies to consider alternatives to directly investing in dairy land.

In April, Yashili, one of China’s biggest infant baby formula and soy milk powder makers, was granted Overseas Investment Office. In its submission, it said the the plant will create 100 local jobs.

The plan follows a major shift in Yashili’s business model, following the food-poisoning scandal in China in which tainted milk killed at least six infants and sickened 300,000 others.

Yashili was one of 22 milk producers in China, including former Fonterra subsidiary Sanlu, that failed a government test in 2008 screening for melamine, which had been added to the milk to make it appear richer in protein.

The incident cost Yashili 787 million yuan ($NZ150 million) that year, including 456.9 million yuan for writedown of inventory and a 61.2 million yuan payment to the compensation fund set up by the China Dairy Industry Association.

Yashili, majority owned by the Zang family, maintains it did not add any melamine to its products and blames raw milk dealers for the catastrophe.

But its supply chain was compromised and, since 2008, it has moved from using domestically produced dairy materials to importing premium high-quality raw milk powder.

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