October 16, 2008 - Following the installation of new testing equipment for tracing melamine in China, Arla Foods and its Chinese partner Mengniu have resumed their joint production of milk powder products in Hohhot.
The company "Mengniu Arla" only produces milk powder and is a joint venture between China’s largest dairy company, Mengniu Dairy and the Danish-Swedish Arla Foods. The production in Hohhot in Inner Mongolia has been at a standstill since September 16 when it was revealed that the Chinese dairy industry had been hit by melamine contamination in the raw milk supplied to the dairies. Since then, Danish and Chinese engineers have been focused on setting up a new testing system for Mengniu Arla, which can trace melamine in both raw milk and finished products.
"Under the new system, all milk will be tested for melamine four times during production,” says Jais Valeur, Executive Group Director with responsibility for Arla Foods Ingredients, Arla’s global milk powder business.
”The first test is carried out when the milk arrives at our partner’s dairy. The second is undertaken when the milk arrives at our joint factory and the third is carried out during checks on the finished products in our own warehouse. Yet another test is then conducted before the products are despatched to stores. In this way, consumers can be sure that no melamine contaminated milk arrives at our factory and that our products are 100 per cent safe.”
The new testing system will provide reliable proof that no Mengniu Arla products contain melamine. The products will also carry a label stating that they have been tested for melamine.
The financial cost of the melamine scandal to Mengniu Arla remains unclear.
"Right now, the crucial thing is to regain our consumers’ confidence in locally produced products which, of course, has been dented by what’s happened,” says Jais Valeur.
”Current estimates are that our sales over the coming months will be at 30 per cent of their normal level, but we expect to return to normal sales levels in the second half of 2009.”
Arla Foods’ milk powder partnership with Mengniu Dairy started in September 2006.