Thursday, 29 August 2013 00:00
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By Uditha Jayasinghe
Beleaguered dairy giant Fonterra took a step towards normalcy by reopening its factory in Sri Lanka yesterday, the company said.
Fonterra announced it has resumed its consumer operations in Sri Lanka, following a thorough assessment by management that there is no risk to Fonterra staff and that the situation has now stabilised. “Last Friday we took the decision to temporarily suspend our Sri Lanka operations to protect our people and to protect our farmer shareholders’ assets,” Fonterra Chief Executive Theo Spierings was quoted as saying in the statement.
“I am now confident that our people are safe and the business is ready to resume operations and continue selling high quality dairy nutrition to Sri Lankan people.”
A court order, which had prevented Fonterra from selling its products in Sri Lanka, was also overturned last Friday.
Spierings said Fonterra will continue to work with Sri Lankan and New Zealand Government authorities on a long-term sustainable solution to support its Sri Lankan customers, communities and the local dairy sector.
Fonterra was accused by a Government research institute of having dicyandiamide (DCD) in its milk power, a chemical used in fertilisers to prevent them from soaking into rivers, which can be toxic in large amounts.
Two batches of Fonterra’s imports were banned by the Health Ministry three weeks ago for containing DCD but the company has rejected the charge.
The 39 metric tons of milk powder was recalled and products such as chocolate that could also contain contaminated milk powder or whey protein were ordered off shelves.
Sri Lanka is the fifth largest purchaser of Fonterra products in the world.
Fonterra has a large footprint in Sri Lanka with 65% market share that climbs to 76% when yoghurt is included.
According to the Fonterra website its powder plant in Colombo’s outskirts packs 475,000 packs of milk each day and blends 5,270 metric tons of milk powder every month. Its liquid counterpart processes half a million yoghurt cups a day, producing 10,370 tons of cultured products, 850 tons of pasteurised milk and 2,460 tons of UHT products every year. Some of the liquid dairy is procured from 4,000 odd local farmers.
