Beverage producers to compete for ownership of Sanlu

(Xinhua)
Updated: 2008-10-13 16:39

BEIJING -- Several companies are competing for ownership of China's former dairy giant, Sanlu Group.

Sanlu ceased production in mid September after it was discovered it's baby formula was tainted with the chemical melamine.

The country's largest soft drink producer, Wahaha, announced its intention to purchase the troubled company last Saturday.

Well-known dairy suppliers such as Beijing-based Sanyuan Food and northeastern Heilongjiang's Wondersun Dairy, also want to buy Sanlu.

Wahaha said increasing demand for domestically produced milk was the major reason behind its move to purchase the company.

"We formerly used imported milk powder for our milk drinks. Because its current market price more than doubled from 2007 to 5,700 US dollars per ton, we are considering building our own production line," said the group's head, Zong Houqing.

Zong pointed out Sanlu's equipment, materials, and skilled workers were what make the acquisition so desirable for Wahaha.

According to Zong, the company currently buys at least 150 thousand tons of milk powder every year.

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