Fonterra is saying little about reports in Beijing that assets of its Chinese joint venture Sanlu Group will be split between two other Chinese dairy companies.
Sanlu has more than 30 dairy plants and eight outside its core operation which were brought back into production at the end
of October.
All 16 dairy companies in Sanlu's base city of Shijiazhuang, the capital of Hebei province, were ordered shut in September after the earlier discovery of high levels of a toxic chemical, melamine, in Sanlu infant formula revealed widespread adulteration of milk.
But a factory wholly owned by Sanlu and seven of its affiliate factories in Shijiazhuang have resumed production after changing their names, and there are reports that Beijing-based Sanyuan Foods may acquire seven Sanlu plants, the People's Daily reported. The 21st Century Business Herald reported another company, Wondersun, may buy a Sanlu factory by the Mudan River.
The People's Daily said it was not clear how Sanlu would dispose of its assets remaining after any sale to Sanyuan and Wondersun.
A Fonterra spokesman said none of the dairy companies had so far confirmed the reports. "It is important to remember that these questions all arise from unconfirmed speculation in the Chinese media."
Fonterra would not comment on market rumours or speculation, but confirmed that Sanlu was in discussion with a number of parties.
"We are not prepared to engage in speculation about what impact these rumoured scenarios would have on the value of Fonterra's shareholding in Sanlu." No decision had been made to relinquish Fonterra's shares in Sanlu.
- NZPA
