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More Sanlu assets go to auction

ANOTHER auction to dispose of the assets of Sanlu Group, the bankrupt Chinese dairy company at the center of last year's tainted milk scandal, will be held next month in Hebei Province capital Shijiazhuang.

Hebei Jiahai Auction Company said yesterday assets to be put up for auction on April 7 will include Sanlu's shares in four dairy plants as well as 169 of its protected trademarks and 12 patent rights.

Beijing-based Sanyuan Group bid 616.5 million yuan (US$90 million) to buy Sanlu's core assets on March 4 in what was considered a government-supported purchase.

Sanlu, headquartered in Shijiazhuang, had been the country's leading seller of milk powder for 15 years until the melamine adulteration scandal broke in September last year.

The group's revenue hit 10 billion yuan in 2007, while Sanyuan's revenue was only 1 billion yuan.

Many dairy producers eyed Sanlu's assets after it announced bankruptcy on February 12.

However, the first auction required bidders to meet two criteria: no involvement in the melamine scandal; and a minimum of 1 billion yuan in total revenue from liquid milk and milk powder product sales last year.

Both of China's leading dairy producers, Yili and Mengniu, were unqualified to bid, since the chemical substance melamine was also found in their milk products, though in smaller proportions than that detected in Sanlu's products.

The auction house said yesterday that no special restriction has been required on bidders' qualification for the second auction of Sanlu's assets.


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