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Dairy giants pledge to improve quality control

By Zhu Zhe (China Daily)
Updated: 2008-10-17 07:03

China's two biggest dairy giants Mengniu and Yili Thursday pledged to take control of milk collection and encourage farmers to send their cattle to company farms for better quality control.

The two also said their current products are totally safe.

Their products, along with those of many other domestic brands, were last month found to contain melamine, an industrial chemical used in plastics but banned in the food industry.

The chemical has been blamed for killing four infants and sickening more than 54,000 children on the mainland. More than 5,800 children are still in hospital suffering from kidney problems, with six in serious condition, according to the Ministry of Health.

Related story:  Major Chinese dairy producers say sales recovering

Both diary giants blamed the middlemen, or milk collecting stations, for the scandal.

"They illegally mixed the chemical in raw milk to make it appear high in protein tests," Pan Gang, president of Yili, told the media.

Pan said Yili processes about 9,000 tons of raw milk a day, of which only less than 1 percent is from private milk stations.

"But the contamination is from that 1 percent," he said, stressing tests have shown all raw milk from Yili's own or contracted farms is free from melamine.

Pan also denied reports that adding melamine to raw milk was a common but hidden practice in the domestic dairy industry. "We had absolutely no idea. No enterprise would have been so silly as to cover it up if it had known about it."

Yang Wenjun, president of Mengniu, also said that no dairy producer has been found guilty of adding melamine to raw milk.

"It's some unscrupulous private milk collecting stations that are to blame," he said, showing reporters around Mengniu's liquid milk production line and dairy base.

Shares in Mengniu and Yili have plummeted since the scandal; and Caijing, a leading business magazine, reported that losses at the companies are expected to top $526 million in the next four to five months.

Officials said quality checks have intensified in recent weeks, with Mengniu and Yili deploying 3,000 inspectors in addition to more than 4,000 from the government.

"Ensure 100 percent safety to consumers," read a slogan on a red banner in the ultra-clean processing and packaging hall at Yili's headquarters in Hohhot.

Its employees showed reporters a new station for testing melamine where workers dressed in lab coats and gloves operate $15-million equipment imported from the United States and Japan.

To ensure the highest standards for milk collection, Yang said Mengniu plans to install cameras at all stations, and place GPS devices on all vehicles transporting raw milk.

However, they noted that the key to improving the quality of raw milk is developing large-scale dairy farms.

"No matter how advanced the production facilities are, if the raw milk is problematic, the products will be problematic," Pan said.

He admitted that scattered cow-raising makes it more difficult for dairy companies to monitor the quality of raw milk, and said Yili would strongly encourage individual farmers to send their cows to its large dairy farms.

Li Zhaolin, deputy director of one such farm in Hohhot, said the plan benefits producers as well as farmers.

"Individually-owned cows are raised in our farm by professionals. Farmers don't have to worry about their cows and they can get 1,500 to 1,800 yuan a year in return," Li said.

Yao Haitao, vice-president of Mengniu, said it plans to build 20 new modern farms, each with more than 10,000 cows, in the next few years. The company now has seven such farms, but the supply is nowhere near enough, he said.