Synutra to Open Milk-Powder Factories for Checks as Babies Develop Breasts

Synutra International Inc., a Chinese baby-formula maker, will open its plants for public inspection after the health ministry ordered a probe following reports that its milk powder led babies to develop breasts.

Synutra buys ingredients from New Zealand’s Fonterra Cooperative Group Ltd., France’s Euroserum and from Heilongjiang province, the Chinese company said today in a statement on its website. Synutra yesterday reiterated its products were safe.

China, the world’s largest exporter, has faced a series of food and product safety failures, with melamine-tainted milk powder killing at least six infants and sickening about 300,000 in 2008. The health ministry is testing samples of milk powder produced by Synutra after parents in Hubei said at least three infant girls developed prematurely, China Daily said yesterday.

“Synutra welcomes consumers and the media to visit our plants for an inspection,” the company said in its statement. “If there was a problem with the ingredients, and Synutra didn’t detect it, it would be a quality check failure by Synutra and the company won’t use that as an excuse.”

Medical examinations of three girls in the city of Wuhan between the ages of four months and 15 months found the level of the hormone estradiol in their bodies was as much as some adult women, the Health Times newspaper said Aug. 5. All three girls consumed the same formula, the newspaper reported, without identifying the producer. The Oriental Morning Post reported Aug. 7 that the infants were fed formula produced by Synutra.

Fonterra Denial

Hormonal growth promotants aren’t allowed in milking cows in New Zealand, Auckland-based Fonterra said in a statement on its website. Fonterra is the world’s largest dairy exporter.

China is the largest market for Fonterra’s milk powder products from New Zealand, spokeswoman Adrienne Sharp said by phone today from Melbourne.

The New Zealand Food Safety Authority is seeking clarification on the media reports and is working with Fonterra, the regulator said yesterday in a statement.

“Synutra products are safe and in no way related to these claims,” Chairman Liang Zhang said in a statement late yesterday. “We are in the process of taking legal action and are evaluating the various timing, jurisdiction and channels through which we may protect our brand.”

The health ministry had said there isn’t a “definitive cause” for the premature development in the babies, the chairman said in the statement. There are no issues with our products, spokeswoman Zhang Yao said by phone today.

The Chinese government executed three people involved in the melamine poisoning cases and in February created its most senior commission on food safety, headed by Vice Premier Li Keqiang.

Synutra rose 0.2 percent yesterday to $13.02 on the Nasdaq stock exchange. The stock plunged 27 percent on Aug. 9 after the claims were reported.

--Vincent Ni in Beijing and Elisabeth Behrmann in Sydney Editors: Tan Hwee Ann, Frank Longid

To contact Bloomberg News staff on this story: Vincent Ni in Beijing at +86-10-6649-7521 or Vni1@bloomberg.net;

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