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Sanlu Group CO., Ltd. (SJZSGCZ) was a state-owned Chinese
dairy products
Dairy products or milk products, also known as lacticinia, are food products made from (or containing) milk. The most common dairy animals are cow, water buffalo, nanny goat, and ewe. Dairy products include common grocery store food items in ...
company based in
Xinhua District,
Shijiazhuang
Shijiazhuang (; ; Mandarin: ), formerly known as Shimen and romanized as Shihkiachwang, is the capital and most populous city of China’s North China's Hebei Province. Administratively a prefecture-level city, it is about southwest of Beijin ...
, the capital city of
Hebei
Hebei or , (; alternately Hopeh) is a northern province of China. Hebei is China's sixth most populous province, with over 75 million people. Shijiazhuang is the capital city. The province is 96% Han Chinese, 3% Manchu, 0.8% Hui, an ...
. It produced one of the oldest and most popular brands of
infant formula
Infant formula, baby formula, or simply formula (American English); or baby milk, infant milk or first milk (British English), is a manufactured food designed and marketed for feeding to babies and infants under 12 months of age, usually prepar ...
in China.
[Sanlu decides to recall melamine-contaminated product]
news.163.com (11 September 2008) New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
's
Fonterra
Fonterra Co-operative Group Limited is a New Zealand multinational publicly traded dairy co-operative owned by around 9,000 New Zealand farmers. The company is responsible for approximately 30% of the world's dairy exports and with revenue exce ...
owned 43% of Sanlu.
In September 2008, it was involved in an
adulterated powdered milk scandal, affecting some 294,000 Chinese infants and killing six.
["China Melamine Death Toll Rises"]
BBC #REDIRECT BBC #REDIRECT BBC
Here i going to introduce about the best teacher of my life b BALAJI sir. He is the precious gift that I got befor 2yrs . How has helped and thought all the concept and made my success in the 10th board exam. ...
...
(2 December 2008) Their
infant formula
Infant formula, baby formula, or simply formula (American English); or baby milk, infant milk or first milk (British English), is a manufactured food designed and marketed for feeding to babies and infants under 12 months of age, usually prepar ...
had been adulterated with
melamine
Melamine is an organic compound with the formula C3H6N6. This white solid is a trimer of cyanamide, with a 1,3,5-triazine skeleton. Like cyanamide, it contains 67% nitrogen by mass, and its derivatives have fire retardant properties due t ...
, which can cause
kidney stones
Kidney stone disease, also known as nephrolithiasis or urolithiasis, is a crystallopathy where a solid piece of material (kidney stone) develops in the urinary tract. Kidney stones typically form in the kidney and leave the body in the urine s ...
and other complications. It received a bankruptcy order from Shijiazhuang Court on 24 December 2008,
and several of its top managers were sentenced to long prison terms.
[David Barboza]
Death Sentences in Chinese Milk Case
''The New York Times'', 22 January 2009
Ownership and business
The company began as Shijiazhuang Dairy Company (SDC) in 1956. After several acquisitions in 1995, Sanlu Group was formed in 1996. Tian Wenhua, then general manager of SDC, became President and general manager of Sanlu. Under Tian, Sanlu led the Chinese
powdered milk
Powdered milk, also called milk powder, dried milk, or dry milk, is a manufactured dairy product made by evaporating milk to dryness. One purpose of drying milk is to preserve it; milk powder has a far longer shelf life than liquid milk and do ...
market for 13 consecutive years in terms of sales. Tian was considered one of the most successful entrepreneurs in China for her role in building the company. She was named deputy chairman of the
China Dairy Industry Association (), and elected to the National Committee of the
Chinese People's Political Consultative Conference
The Chinese People's Political Consultative Conference (CPPCC, zh, 中国人民政治协商会议), also known as the People's PCC (, ) or simply the PCC (), is a political advisory body in the People's Republic of China and a central part of ...
. The company was a collective; managers and workers both owned shares of Sanlu.
Sanlu became Shijiazhuang's largest taxpayer since it had become the largest formula seller in China for a continuous 15-year period. Richard McGregor, author of ''
The Party: The Secret World of China's Communist Rulers'', said that Sanlu became "an invaluable asset for a city otherwise struggling to attract industry and investment on a par with China's premier metropolises."
[
In December 2005, a joint venture agreement was signed which involved ]New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
dairy cooperative Fonterra
Fonterra Co-operative Group Limited is a New Zealand multinational publicly traded dairy co-operative owned by around 9,000 New Zealand farmers. The company is responsible for approximately 30% of the world's dairy exports and with revenue exce ...
taking a 43% equity stake in the Chinese dairy by injecting ¥864 million. The joint venture company started trading in 2006. The majority 56% stake is owned by Shijiazhuang Three Deers Limited ().
Expansion
In February 2006, the group opened a dairy plant in Tangshan
Tangshan () is a coastal, industrial prefecture-level city in the northeast of Hebei province. It is located in the eastern part of Hebei Province and the northeastern part of the North China Plain. It is located in the central area of the Boha ...
with annual capacity of 200,000 tons of powdered milk. At the time of signing the joint venture contract with Fonterra, the company declared it would invest 3 billion yuan for external growth, with the aim of forming a national industrial network over the next three years. In April 2006, Sanlu acquired a liquid milk production base in Weifang
Weifang () is a prefecture-level city in central Shandong province, People's Republic of China. The city borders Dongying to the northwest, Zibo to the west, Linyi to the southwest, Rizhao to the south, Qingdao to the east, and looks out to the L ...
, Shandong, capable of producing 300,000 tons of liquid milk every year, at an outlay of 400 million yuan. In October of the same year, the company invested in a production facility with capacity of 100,000 tons of lactic acid bacteria drink and yoghurt in Xinxiang
Xinxiang ( ; postal: Sinsiang) is a prefecture-level city in northern Henan province, China.
It borders the provincial capital of Zhengzhou to its southwest, Kaifeng to its southeast, Hebi and Anyang to its north, Jiaozuo to its west, and the ...
, Henan, at a cost of 120 million yuan.[Sanyuan to buy 7 Sanlu dairy plants]
China.org.cn, 18 November 2008
In 2007, its sales reached ¥10 billion. Milk powder sales of the group ranked number 1 for 15 consecutive years, with a market share of 18 percent.[ The company prided itself on its stringent quality control procedures, boasting its extremely rigorous tests on its products. "Made in China", a special edition of the ]CCTV
Closed-circuit television (CCTV), also known as video surveillance, is the use of video cameras to transmit a signal to a specific place, on a limited set of monitors. It differs from broadcast television in that the signal is not openly t ...
program "''Quality Reports Weekly''", aired on 2 September 2007, and focused on the company. It claimed over 1,000 different tests were carried out before its products leave the factory. To that end, on 8 January 2008, it was awarded second prize at the 2007 National Scientific Techniques Awards in the category of 'Innovative infant formula research and other related techniques'. A number of its products were exempt from government inspection for having passed government quality checks three times in succession. Sanlu is one of the largest employers in Shijiazhuang
Shijiazhuang (; ; Mandarin: ), formerly known as Shimen and romanized as Shihkiachwang, is the capital and most populous city of China’s North China's Hebei Province. Administratively a prefecture-level city, it is about southwest of Beijin ...
, with close to 10,000 people on its payroll.
Milk powder scandal and demise
In September 2008, Sanlu came to international attention due to product concerns regarding its infant formula, which was discovered to have been contaminated with melamine
Melamine is an organic compound with the formula C3H6N6. This white solid is a trimer of cyanamide, with a 1,3,5-triazine skeleton. Like cyanamide, it contains 67% nitrogen by mass, and its derivatives have fire retardant properties due t ...
, a non-alimentary chemical which causes kidney stones.[Death toll rises to four in tainted baby formula scandal in China]
Xinhua News Agency (18 September 2008) An estimated 300,000 babies became ill, and six cases resulted in death.
The Xinhua News Agency
Xinhua News Agency (English pronunciation: )J. C. Wells: Longman Pronunciation Dictionary, 3rd ed., for both British and American English, or New China News Agency, is the official state news agency of the People's Republic of China. Xinhua ...
reported that Sanlu received its first complaints about baby formula in December 2007.[''The poisoning of China's babies'', Telegraph]
/ref> Fonterra
Fonterra Co-operative Group Limited is a New Zealand multinational publicly traded dairy co-operative owned by around 9,000 New Zealand farmers. The company is responsible for approximately 30% of the world's dairy exports and with revenue exce ...
was allegedly only alerted to the contamination on 2 August. There was no immediate trade recall. Fonterra said that local administrators refused an official recall.[Klaudia Lee, "NZ alerted China to tainted milk, PM says", Page A1, '']South China Morning Post
The ''South China Morning Post'' (''SCMP''), with its Sunday edition, the ''Sunday Morning Post'', is a Hong Kong-based English-language newspaper owned by Alibaba Group. Founded in 1903 by Tse Tsan-tai and Alfred Cunningham, it has remained ...
'' (16 September 2008) Fonterra notified the New Zealand government on 5 September after the scandal had already hit the Chinese press and after Fonterra directors had made their escape from China. Three days later, Prime Minister, Helen Clark
Helen Elizabeth Clark (born 26 February 1950) is a New Zealand politician who served as the 37th prime minister of New Zealand from 1999 to 2008, and was the administrator of the United Nations Development Programme from 2009 to 2017. She was ...
had Beijing officials alerted directly.[ Clark accused the company and officials of covering up to avoid an official recall.
On 15 September, the company issued a public apology for the contaminated formula;][Raymond Li, "Censorship hammer comes down over scandal", Page A5, '']South China Morning Post
The ''South China Morning Post'' (''SCMP''), with its Sunday edition, the ''Sunday Morning Post'', is a Hong Kong-based English-language newspaper owned by Alibaba Group. Founded in 1903 by Tse Tsan-tai and Alfred Cunningham, it has remained ...
'' (16 September 2008) Sanlu was ordered to halt production, and to destroy all unsold and recalled products. Authorities reportedly seized 10,000 tons of product.[Xinhua]
"China to destroy 10,000 tons of tainted baby formula"
chinaview.cn (15 September 2008)
After testing samples from 491 batches of products sold by all 109 companies producing baby formula, the said that all 11 samples from Sanlu failed the melamine test.[Xinhua]
"China seizes 22 companies with contaminated baby milk powder"
chinaview.cn (16 September 2008)[Klaudia Lee, "Tests find tainted baby milk at 21 more firms", Page A1, '']South China Morning Post
The ''South China Morning Post'' (''SCMP''), with its Sunday edition, the ''Sunday Morning Post'', is a Hong Kong-based English-language newspaper owned by Alibaba Group. Founded in 1903 by Tse Tsan-tai and Alfred Cunningham, it has remained ...
'' (17 September 2008) Sanlu, whose products sell at half the price of equivalents on the market,[Lee Spears]
"China Revokes 'Inspection-Free' Right as Milk Scandal Spreads"
Bloomberg (18 September 2008) recorded the highest levels of contamination among all the samples tested, at 2,563 ppm.[Administration of Quality Supervision, Inspection and Quarantine announces list of enterprises involved in Melamine milk](_blank)
China Central Television (16 September 2008)
Tian Wenhua (), Chairman and general manager of Sanlu and Party Secretary was stripped of her party and functional posts during an extraordinary meeting of the Hebei
Hebei or , (; alternately Hopeh) is a northern province of China. Hebei is China's sixth most populous province, with over 75 million people. Shijiazhuang is the capital city. The province is 96% Han Chinese, 3% Manchu, 0.8% Hui, an ...
provincial standing committee of the Communist Party of China
The Chinese Communist Party (CCP), officially the Communist Party of China (CPC), is the founding and sole ruling party of the People's Republic of China (PRC). Under the leadership of Mao Zedong, the CCP emerged victorious in the Chinese Civil ...
. Four Shijiazhuang officials, including vice mayor in charge of food and agriculture, Zhang Fawang, were reportedly removed from office.[''Xinhua'']
"Officials, company manager sacked following baby milk powder scandal"
chinaview.cn (16 September 2008) Mayor Ji Chuntang reportedly resigned on 17 September;[ Tian was charged under Articles 144 and 150 of the criminal code.
Since Sanlu, the region's largest purchaser of milk, was ordered to halt production, many small dairy farmers were put into hardship.][Gillian Wong]
China's dairy farmers fret as milk scandal grows
Associated Press (22 September 2008) On 24 September, Fonterra announced that it had written down the carrying value of its investment by NZ$139 million (two-thirds), reflecting the costs of product recall and the impairment of the 'Sanlu' brand "as a direct consequence of the criminal contamination of milk in China".
Bankruptcy
On 27 September 2008, China Economic Net
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
reported that Sanlu may have been bankrupted and soon be taken over by Beijing Sanyuan Food Company Ltd.Shijiazhuang
Shijiazhuang (; ; Mandarin: ), formerly known as Shimen and romanized as Shihkiachwang, is the capital and most populous city of China’s North China's Hebei Province. Administratively a prefecture-level city, it is about southwest of Beijin ...
plants, and plants in Tangshan
Tangshan () is a coastal, industrial prefecture-level city in the northeast of Hebei province. It is located in the eastern part of Hebei Province and the northeastern part of the North China Plain. It is located in the central area of the Boha ...
, Shandong and Henan
Henan (; or ; ; alternatively Honan) is a landlocked province of China, in the central part of the country. Henan is often referred to as Zhongyuan or Zhongzhou (), which literally means "central plain" or "midland", although the name is al ...
, and would assume some of Sanlu's debt. Consideration was not disclosed, but sum is said to be of the order of ¥800 million.[
On 19 December, Sanlu secured a loan of ¥902 million to pay medical expenses of and compensation to children affected by tainted powdered milk it produced. It was announced on 25 December that Shijiazhuang court accepted a creditor's bankruptcy petition against Sanlu, which reportedly had net debt of ¥1.1 billion. Shijiazhuang city, the controlling shareholder, hopes to sell its distribution network as a going concern.
]
Trial of executives
Four Sanlu executives went on trial on 31 December 2008 charged with producing and selling fake or substandard products. Tian Wenhua, former general manager, former deputy general managers Wang Yuliang and Hang Zhiqi, and Wu Jusheng, a former head of Sanlu's milk division appeared in court. Tian pleaded guilty to her role in the scandal, and expressed her remorse, and also called for China to consider embracing the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
's standards on melamine. Wang, who had leaped off a building in a suicide attempt, offered his apology and remorse: "When I think of the children who were harmed ... I feel extreme inadequacy towards these sick children and their parents."
On 22 January 2009, Tian was sentenced to life imprisonment
Life imprisonment is any sentence of imprisonment for a crime under which convicted people are to remain in prison for the rest of their natural lives or indefinitely until pardoned, paroled, or otherwise commuted to a fixed term. Crimes for ...
, while other Sanlu executives received sentences of five to fifteen years. Two other men were sentenced to death.
BBC News, 22 January 2009.
See also
*Food safety in China
Food safety in China is a concern relating to agriculture in the world's most populated country. China's principal crops are rice, corn, wheat, soybeans, and cotton in addition to apples and other fruits and vegetables.USDAbr>China - Key Statistic ...
* Chinese protein export contamination
References
{{Reflist, 30em
External links
Sanlu
(Archive)
Dairy products companies of China
Companies based in Hebei
2008 Chinese milk scandal
Defunct manufacturing companies of China
Fonterra
Companies based in Shijiazhuang
Companies that have filed for bankruptcy in the People's Republic of China
Chinese companies established in 1956
Chinese companies disestablished in 2008
Food and drink companies disestablished in 2008
Food and drink companies established in 1956