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China Milk safe to drink? U dare to let your own child drink?
I think the main problem here is when they are going to pay the bond money from the creditors ? Last time keep saying that they have sufficient cash outside china . Until now still no action ? Bond contract ending 2011 right ? if yes , i think China Milk is basically waiting creditors to consolidate their company
Strong comeback by China milk firm
By CHOW HOW BAN
hbchow@thestar.com.my
MENGNIU Dairy Co Ltd is among the dairy companies in China that have been in the news for all the wrong reasons over the past three years.
As the leading Chinese dairy producer, Mengniu has suffered a setback for selling infant formula containing melamine that caused six deaths and renal failure in thousands of babies during the milk scandal in 2008.
In February 2009, the Chinese food safety control authorities ordered Mengniu to stop production of its high-end product, Milk Deluxe, which was said to contain osteoblast milk protein (OMP). Weeks later, the Health Ministry clarified that the milk was safe to drink after conducting thorough tests.
But the ministry said the company still did not get the state's approval to use the OMP additive which was not listed as a legal food ingredient under Chinese food safety laws.
Then in October last year, the Inner Mongolia-based company allegedly made up a story claiming that infant formula produced by its main competitor Yili Group contained fish oil which could lead to premature sexual development.
(A local court in Inner Mongolia recently sentenced six employees from Mengniu and BossePR public relations company to jail terms of between six months and a year for spreading false news on Yili).
The melamine crisis was a major blow to the Chinese dairy industry which saw Sanlu Group going bankrupt and other producers incurring over two billion yuan in losses.
According to its annual report in 2008, Mengniu's gross profit dropped by 2.8% to 4.67 billion yuan (RM2.16bil) from 2007. The company lost 949 million yuan (RM439mil) in the wake of the crisis.
But the Hong Kong-listed company rebounded in 2009 with a net profit of 1.116 billion yuan (RM516mil) and its net profit reached 1.237 billion yuan (RM572mil) last year.
Evidently, Chinese consumers are a forgiving lot Mengniu has since maintained its top three position in the Chinese dairy market. Mengniu president Yang Wenjun says it is not easy to restore consumers' confidence in their products.
It's true that China had been marred by all kinds of food safety crises, he says during a recent interview in Beijing. “Instead of singling out the dairy industry, we should say this is a problem in the entire food industry as other sectors also had their share of problems,” he adds
He says that food safety should not be compromised in his business and the melamine crisis had exposed flaws in the company's production and distribution line.
Following the crisis, Mengniu announced new food safety control measures such as hygiene and animal feed control, the installation of a global positioning monitoring system on trucks travelling from farms to manufacturing plants, and deployment of quality control personnels to each milking station and truck transporting the milk.
Yang says consumers should be fair in assessing China's dairy industry as the country, like other developing nations, is still learning how to develop a better food safety control and management system.
“I remember the United States experienced one of its biggest milk scandals more than a hundred years ago when thousands of infants died as a result of drinking swill milk'. Now, US is among the top nations which managed to keep death rate caused by food crisis at the lowest levels. This is because they have learned from experiences and improved their way of addressing the crises,” he adds.
Yang is one of the longest-serving staff at Mengniu. He had worked as the general manager and vice-president since the company was established in 1999.
In 2006, he replaced the legendary founder, Niu Gensheng, as the president after the latter stepped down and donated all of his company shares to set up a special fund in aid of charity.
In early April, the Chinese General Administration of Quality Supervision, Inspection and Quarantine announced that more than half of the 1,176 manufacturers of dairy products would lose their licence as they did not meet the national standards.
According to Yang, the total sales of the local manufacturers reached about 180 billion yuan (RM82.9bil) in 2009 while Nestle's dairy division generated about US$20bil (RM60.2bil) in China.
He says that the Swiss brand is still the major player in the China market even though the huge number of Chinese manufacturers should have registered higher sales.
“This shows that many local dairy makers are still not up to the mark. The unhealthy competition resulted in them not able to ensure food quality,” he says, adding that: “Many of the smaller companies do not have the resources to carry out research and development (R& D) and maintain high levels of food safety control throughout their production lines. So, the restructuring of China's dairy industry is inevitable.”
He says China has raised its bar for dairy makers to meet requirements such as installation of state-of-the-art self-examination hardware and better food management and distribution system.
Yang was tasked to revolutionise Mengniu. After taking over the top post, he transformed the way Mengniu's manufacturing plants and research centres are run. He promotes low-carbon production and working culture as a way of life.
Mengniu has the world's largest biogas power plant which generates 10GW electricity from cow manure. It boasts sewage treatment facilities at its 42 factories and the wastewater is treated and used for irrigation instead of being disposed of to the environment.
The company has also reduced transportation carbon emission and used environment-friendly packaging materials to build a green industrial chain.
Mengniu has jointly built 14 farms throughout China with a capacity of 10,000 cattles each with partners from Australia, New Zealand, Singapore and Indonesia, and plans to add 30 more in future. The dairy maker sources about 80% of its milk from natural farms.
Last year, the company launched a recycling campaign to encourage the public to recycle empty milk boxes. The company collects the boxes, recycle and turn them into recycled furniture.
“We have not tabulated the number of milk packaging collected. But we will double the number this year,” Yang says.
In the past five years, Mengniu has shown great hunger in expanding its market share domestically and globally.
In 2006, Mengniu teamed up with Danish food giant Arla Foods to establish Mengniu Arla Dairy Products Co Ltd to diversify their infant formula products and exchange technologies.
Last November, Mengniu acquired 51% of Junlebao, which is China's No. 4 yoghurt maker, at a cost of 470 million yuan (RM216mil). They even attempted to bid for 50% of France's Yoplait shares offered by Lactalis but General Mills of US eventually won the bid.
“Overseas expansion will be the next phase of our development. We have made some contacts with other foreign companies but we will still place the China market as our top priority,” Yang says. He adds that Mengniu has set up workstations in France and other countries to strengthen its R& D and make inroads abroad.
Link for this article:
http://biz.thestar.com.my/news/story.asp?file=/2011/4/16/business/8468520& sec=business
Risky but at the same time attractive too!
iPunter ( Date: 06-Mar-2011 19:41) Posted:
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Malpractices aside, the price of any stock is determined by people's ideas (of value).
And because such ideas can literally change overnight,
Buying or selling any stock is a risky business...
Hulumas ( Date: 06-Mar-2011 19:31) Posted:
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All in all, as I said several times, it is just a risk or consequences to trade too liquid counter! I give you simple analogical rationale example: If some one printing a fake currency notes, they will print as much as he/she can and having as big VOLUME DISTRIBUTION to the market, so do particular listed company's share in capital market, they try to make VOLUME DISTRIBUTION as big as he/she can through creating too liquid transaction in stock market too!
yummygd ( Date: 06-Mar-2011 16:30) Posted:
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i remembered china milk n china hongx were buy calls on BT also. so dangerous not all their buy calls are real.
Losing in stocks can definitely cause everyone to leave you...
And this is the reasons why so many have committed in the past.
It is not so much the loss itself, but the consequences of the loss.
I think Hulumas is quite ok because I believe he made alot when the China shares started to list in Singapore here(a few years back) those were the good time if one knew how to throw when the prices were high.
For those who lost $4000, just think in a way that your girl friend/wife has lost an expensive Diamond ring when travelling with you in Cairns.
For those who lost $60,000, just think in a way that your car has been stolen in Malaysia without insurance coverage.
There is a phrase said by a western celebrity, it's the amusing strength of people adapting to changes. like lost of love ones, lost of wealth(the later is harder as I drove many people crazy) one day one has to accept it be it like it or not
What is lost is lost, but it's the present situation of the stock market that might harm us more.
Salute ( Date: 06-Mar-2011 12:39) Posted:
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watch the interview with Sakae CEO in CNN this morning. one true statement he made on china Bizman is a general reflection of China people/bizman mentality (though it's pertaining to his potential partnership), ie: they are just interested in short-term==quick money but not serious in long term biz.
I would say one has to give up Chinamilk and Celestial. You know celestial's CEO gave crab reason on not going for the last AGM, he even gave up before anyone did.
Take it as our stock investment risk . . . . What shall we do?
des_khor ( Date: 25-Sep-2010 10:37) Posted:
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Mind your own business please!
beruangface ( Date: 12-Jan-2011 13:06) Posted:
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But recalling the incidents where infants, children and adults drink
indigestible plastic material into their vulnerable human systems
surely made many cry tears of despair and woe...
Could it be they learned that from others ?
In any case, you must not taint that whole grand civilisation
with one wide sweeping stroke of your giant brush...
beruangface ( Date: 12-Jan-2011 13:06) Posted:
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The ChinaMilk website is online again. Update soon???
Hope that they have sorted out the mess and starts to trade again :)
I also have to write-off worst case close to 4K, shit man!!! I simply dun understand how the company can become like tat.
If this company really gets delisted, would we be able to get some money back? E.g. the amount equivalent to the last listed price?
Luckily I only paid $3,900 for it. But I learnt something. Never invest in speculative China stocks.
now I know why China ppl is getting richer and richer, they dont only con visitors in their country with fake jewelleries and tea leaves, now they go overseas to cheat ppl with fake ipo and stocks %@%#$%#^%^
melchamp ( Date: 12-Jan-2011 11:35) Posted:
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me too!! Guess have to write off in this case, any chances we can get back something?? :(
Ya China counters. It's well known by now, that's why sinomen's kept asking analysts to make sure the public knows that they are not china counter.
Like someone ever said the head of the company cares for himself not shareholders' interest. Like Yangzijiang, remember who was the one who threw shares fiercely before it plunged from around $2.50. It's the "chief" of the company.
Money lost is a fact, being painful over it doesn't help(at least it's not other important things in life), especially when there are still other chances available.
good luck to all members here in this new year
stkoh78 ( Date: 12-Jan-2011 01:36) Posted:
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