Fonterra eyes Sanlu's asset

NEW Zealand's Fonterra Co-operative Group, the world's biggest dairy trader and former partner of Sanlu Group, the company at the heart of China's milk scandal, plans to buy Sanlu's share in a joint dairy farm.

Fonterra Chairman Henry van der Heyden said on Monday that his company, which owns 85 percent of the dairy farm in Tangshan, Hebei Province, plans to buy the remaining 15 percent owned by Sanlu, without mentioning how much it plans to spend.

Sanlu's shares in the farm was put up for sale in the fourth and final auction of Sanlu's assets on Monday in the northern Chinese city of Shijiazhuang, the provincial capital. The auction failed.

The dairy farm was established in April 2007 with an investment of 144 million yuan (US$21 million) from Fonterra and Sanlu. It is the first dairy farm that Fonterra set up outside New Zealand.

It now has 3,000 milk cows, of which 2,400 have begun giving milk. Each cow gives an average of 8,000 liters of milk every year.