Foshan Plastics Shuts Unit That Used Recycled Garbage to Make Lunch Boxes

Foshan Plastics Group Co. shut a a subsidiary that produces disposable meal containers after Chinese state television reported that the boxes were made with recycled garbage and violated hygiene regulations.

Foshan Honghua Polyester Chip Ltd., a 70 percent-owned unit that makes tableware, had its factory in southern China shut by Guangdong provincial authorities on Aug. 10 because it allegedly used recycled ingredients in its production, Foshan Plastics said in a filing yesterday to the Shenzhen Stock Exchange.

Up to 1,667 tons, or two-thirds, of Honghua’s production of disposable utensils and packaging violated safety regulations in the first six months of 2010, contributing to 60 percent of the unit’s sales receipt, Foshan Plastics said.

The company shuttered Honghua’s production as of Aug. 10, and will conduct a total recall of its products for destruction, Foshan Plastics said. The company will also investigate the violations of hygiene regulations, according to the statement.

Foshan Plastics shares fell for four days, declining as much as 5 percent today on the Shenzhen Stock Exchange to 12.20 yuan. The company’s spokesman could not be reached to comment.

For Related News and Information: http://www.cs.com.cn/xwzx/05/201008/t20100812_2548693.htm

--Li Xiaowei. Editor: Eugene Tang.

To contact Bloomberg News staff for this story: Li Xiaowei in Shanghai at +86-21-6104-7023 or Xli12@bloomberg.net.

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