Published September 20, 2008

China Milk, China Dairy give assurance on their products

By LYNETTE KHOO
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TWO Chinese companies listed in Singapore have come out to give assurance about the quality of their milk and milk-related products amid a melamine-tainted milk powder and ready-to-drink milk scandal in China.

YOUCAN PRODUCTS
Youcan said on Thursday that besides sending its ice-cream products for testing in China, it will also submit samples to AVA

Melamine is a chemical used to make plastics. Three companies reportedly implicated were Mengniu, Yili and Bright Dairy & Food, which dominate 70 per cent of China's packaged milk market.

China Milk Products Group, which produces raw milk, said in a filing to Singapore Exchange on Thursday that it is not affected by this issue as it does not put additives to its raw milk.

'The group also confirms it does not add melamine into its raw milk to raise protein content,' China Milk said.

To control and ensure the quality of raw milk it produces, its herd of about 21,000 dairy cows of superior breed are fed with specially blended feedstuffs formulated by its experts for different cattle groups.

China Dairy Group, which produces liquid milk and milk powder, said on Wednesday that the Chinese authorities have declared that its infant milk powder products manufactured by subsidiary Yinqiao, are safe and free from melamine.

Yinqiao is on the 'safe-list' of 87 dairy manufacturers released by the Chinese authorities.

As a precautionary measure, AVA said yesterday it is suspending the import and sale of all milk and milk products from China with immediate effect.

Retailers and importers have been instructed to recall these products.

Local food manufacturers have also been instructed to cease the use of milk and milk products from China as ingredients until AVA completes its investigations.

These new measures could hit Singapore-listed Youcan Foods International, a frozen food and ice-cream manufacturer in China, which exports ice-cream to Singapore. Some of Youcan ice-cream products use milk powder as one of its ingredients.

Youcan had on Thursday, made an announcement to SGX, assuring shareholders and consumers of its emphasis on quality control in its production processes.

Some of its ice-cream products use milk powder as an ingredient, which it sources from several suppliers.

Youcan said since the reports of tainted milk powder, it has called for a detailed safety assessment of the group's ice-cream products, especially those that are exported.

In addition to sending its ice-cream products for testing in China, it will also be submitting samples to the AVA for screening, Youcan said in its Thursday announcement.

Yesterday, S-shares recovered some grounds along with the broader market, with China Milk up 8.3 per cent to 45.5 cents, China Dairy up 8.7 per cent to 12.5 cents. Youcan was last traded at 29 cents.