20 Apr 2009

Fonterra recovering from losses in China

9:04 pm on 20 April 2009

The head of Fonterra says the company is recovering from losses in China during a melamine milk scandal last year.

Six babies died and more than 300,000 children became ill after drinking contaminated formula produced by Sanlu, a company part owned by Fonterra.

Fonterra chair Henry Van der Hayden told Morning Report he was not challenged about Fonterra's role in the scandal during his visit.

Mr Van der Hayden said New Zealand dairy imports are seen as a safe option after the scandal caused a lack of confidence in Chinese products.

Food quality focus wanted

Fonterra says Premier Wen Jiabao asked the company to focus its investment in the area of food quality and safety.

After meeting the premier late last week, New Zealand Prime Minister, John Key, said China wants help to develop its dairy and agricultural industries to lift the standard of food safety.

Mr van der Heyden, who accompanied the prime minister as part of a business delegation, says this fits well with the company's strategy.