Beverage producers to compete for ownership of Sanlu

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

"We could put Sanlu into operation again as soon as the purchase took place," Zong said.

Sanlu admitted on Sep. 12 it had found melamine, a chemical banned in food, in some of its baby formula. Production was stopped the following day.

Sanyuan Food was believed to be the first company to make an offer to buy Sanlu. The company suspended it's trade in the stock market since the last trading day in September to do research on a merger scheme.

Some other large dairy producers were also reportedly to have shown interest in purchasing Sanlu, which had gained the reputation as "China's Famous Brand." Those companies include American-owned Feihe Dairy, southwestern Sichuan Province's New Hope Group, and Wondersun, among others.

All potential buyers, along with Wahaha, were not implicated in the country's tainted milk scandal.

Experts said there is little possibility for any company to take over Sanlu single-handedly. Sanlu has more than 700 million yuan (102.5 million US dollars) worth of debts, not to mention money it could owe in compensation claims for toxic milk victims.

"Under the current situation, one probable solution is for Sanlu to be jointly owned by several companies," said Wang Dingmian, member of the Dairy Association of China.

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