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Chinese dairy launches new formula products after buying scandal-hit company's core assets
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09:33, April 21, 2009

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A Chinese dairy has launched new milk powder products after purchasing the core assets of the Sanlu Group, the bankrupt dairy company at the center of the melamine contamination scandal.

The products, including baby formula with brand name "Sanyuan Aixin" and adult formula with brand name "Sanyuan Aiyi," will be placed on shelves soon, said Gao Qingshan, general manger of the Hebei Sanyuan Foods Co. Ltd., a subsidiary of the Beijing Sanyuan Foods Co. Ltd., on Monday.

The company has delivered goods to wholesalers in 13 provinces since Sunday, Gao said.

The products are the first group of new formula products the company manufactured after the scandal.

The Shijiazhuang-based company and the Beijing Sanyuan Group Co. Ltd., the parent company of the Shanghai-listed Beijing Sanyuan Foods Co. Ltd. successfully bid 616.5 million yuan (90 million U.S. dollars) to buy Sanlu's core assets on March 4.

"The milk used for manufacturing the Sanyuan Aixin baby formula is provided by the Beijing Sanyuan Luhe Dairy Cattle Center. Other milk is from 11 cattle farms around Shijiangzhuang that are operated under the guidance of experts sent from Beijing Sanyuan and in light of the standards of the Luhe cattle center," Gao said.

"All the products are safe and reliable," he said.

Sanlu Group, which was based in Shijiazhuang, capital of northern Hebei Province, had been China's leading seller of milk powder for 15 years until the melamine adulteration scandal broke in September last year. The group's revenue hit 10 billion yuan in2007, while Sanyuan's revenue was only 1 billion yuan.

The company's tainted baby milk powder was found to have caused the deaths of at least six children and sickened more than 300,000 others.

Many dairy producers eyed Sanlu's assets after it was declared bankruptcy on Feb. 12.

However, the first auction required bidders to meet two criteria: no involvement in the melamine scandal; and a minimum of1 billion yuan in total revenue from liquid milk and milk powder product sales last year.

Both of China's leading dairy producers, Yili and Mengniu, were unqualified to bid, since the industrial chemical melamine was found in their products, though in smaller proportions than in Sanlu's products.

Source: Xinhua

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