Compiled by Caijing staff

From Caijing Online

A leading state-owned dairy producer, Sanlu Group posted sales revenues of more than 10 billion yuan in 2007. Established in 1956, Sanlu is based in Shijiazhuang, a city in northern China's Hebei Province.

Sanlu sold various dairy products, but its milk powder, ranked top in sales volume in China for eleven consecutive years, was its mainstay.

Sanlu operated more than 30 plants in Beijing, Tianjin, Hebei, Jiangsu, Guangdong, and other major cities and provinces across China. In 2006, New Zealand’s Fonterra, the world's largest dairy seller, acquired a 43 percent stake in Sanlu with 864 million yuan, the largest foreign investment in China's dairy industry.

In September 2008, Sanlu came to international attention when its infant milk formula was found contaminated by melamine, an industrial chemical that can cause human kidney problems. On September 11, China's Ministry of Health announced that "baby formula produced by Sanlu Group is highly suspected to be contaminated by melamine." On the same day, Sanlu recalled all of its milk powder produced before August 6.

However, the tainted milk scandal continued to widen. On September 13, Sanlu halted production. And on September 17, Tian Wenhua, former general manager of Sanlu, was detained.

On December 24, Sanlu Group was declared bankrupt by a court in Shijiazhuang after four months of halted production. The company reportedly faces a total debt of 2.66 billion yuan against assets valued at 1.56 billion yuan.

According to official statistics, Sanlu's tainted milk powder has sickened nearly 300,000 children across China, with four dead.