Survivor leads China’s milk industry
China’s dairy industry took an enormous blow with the Sanlu tainted milk scandal, which led to the deaths of three babies, the hospitalization of tens of thousands of others and an international scandal that shamed China.
However, looking back over the wreckage of the affair, there is one dairy producer which stands clear of the scandal, Sanyuan, and it is hoped that it can show the way where Chinese enterprise and government at all levels has failed.
Test results announced publicly on Sept. 17 and 18 by the General Administration of Quality Supervision, Inspection and Quarantine showed the problem was bigger than expected. Many leading domestic brands were tarnished in the scandal, but one firm’s reputation remained intact. It was Beijing-based Sanyuan.
“I learned of the test results from the media,” said Wang Dan, a marketing manager of Beijing Sanyuan Foods Company Limited. “I’m not surprised that our products have stood the test.”
The samples were drawn directly from stores. The second test focused on liquid milk, with 53 batches from Sanyuan and 121 batches from Mengniu. “Mengniu has a much bigger market share than us. The ratio is not in proportion. The check on Sanyuan is stricter,” Wang said.
She was surprised that so many domestic brands were involved in the melamine scandal. As a marketing manager she realized the big opportunity which lay ahead for Sanyuan.
Sales of Sanyuan milk soared after the announcement of test results. In the evening of Sept. 21, a Xinhua reporter found in Wal-Mart at Xuanwumen, Beijing, empty shelves where Sanyuan milk had been. Colorful fresh milk and yogurt products from other brands packed the neighboring shelves. A saleswoman said Sanyuan milk was sold out when she came to work at 1 p.m. The store had asked for more, she added.
Similar accounts came from Carrefour, Merrymart and other supermarkets in Beijing. According to the company, Sanyuan sales jumped threefold in Beijing, mainly of liquid fresh milk. Panic buying was reported in some other cities and provinces. Sanyuan milk was sold out for a while in Shanxi Province.
Prior to all this, Sanyuan matched output to sales. Now employees worked extra hours. The capacity was exploited to the full. Machines ran 18to 20 hours a day, with the remaining hours given over to maintenance.
Logistics were reinforced, too. Delivery in Beijing increased, in general, from once to twice a day. For the above-mentioned big stores, the surge in supply required four to five deliveries a day.
Tags: dairy, industry, milk