Dairy giants involved in scandal have spent millions on factories in Inner Mongolia

PUBLISHED : Monday, 22 September, 2008, 12:00am
UPDATED : Monday, 22 September, 2008, 12:00am

Mengniu and Yili, the dairy giants embroiled in the snowballing tainted-milk scandal, have spent millions of dollars to erect ultra-modern plants near Hohhot in Inner Mongolia .

The showpiece factories are open to visitors year-around, and travel agents in the city include them as part of featured tours in Hohhot, along with visits to nearby grasslands and horse riding.

Yili's model milk-powder factory is in Jinshan Industrial Park, about 30km west of Hohhot, where everything from the red carpet outside the front door to the automatic production lines show the host's resolve to impress visitors.

Wearing protective bags on their shoes, visitors walk through a long corridor and check the production line through huge glass windows.

A Yili tour guide claims no human hand has contact with the milk or products throughout the processing pipeline, until the finished items are packed, ready for shipping.

The workers in white suits walking between the machines are only there to check the equipment or clean the floor.

Almost all of the equipment is imported from Sweden, Germany and other western countries, and represents the most advanced technology in the sector in the world, according to the tour guide.

A quality-control laboratory has been built right along the tourist corridor, and the guide tells everyone how precisely its equipment works.

Photos of movie and sports stars signed by Yili to endorse its products can be seen along the corridor and the product display room.

Almost all top state leaders have stopped by the factory at one time or another - their pictures also adorn the corridor - and a handwritten note from former ex-president Jiang Zemin is etched into a huge stone at Yili's headquarters.

Mengniu, Yili's rival in the town, is about 40km south of Hohhot in Helingeer county, and has similar facilities at its showcase factories.

Mengniu has a much longer corridor than Yili, and visitors are asked to board a tour car to finish the 1.5km trip. Shiny steel pipes, automatic transmission belts and robots can be seen throughout the factory. Not surprisingly, all the equipment, apart from some shipping devices made by a factory in Shanxi province , is imported.

The highlight of the tour is the Mengniu Austasia International Farm, which cost Mengniu 200 million yuan (HK$227 million) to build. All the cows were imported from Australia and are lavished with nutritious feed, massages, music and individual cell beds.

There is an automatic milking device, which according to the guide cost about US$400,000 to import and allows cows to milk themselves any time they like. 'But it can only milk one cow at a time, so not so many cows have the chance to enjoy the luxury,' the guide says.

Cows in this farm each produce 8 to 10 tonnes of milk a year - almost double the output from cows raised by regular milk farmers.

But even Niu Gensheng , Mengniu's chief executive, admitted he could make almost no money from such a costly farm.

Mr Niu said his intention was partly to allow Chinese to learn a better way to raise cows, from his model plant, and in that way push improvement of China's dairy industry.

Mengniu's model plant has been a hit among tourists, with about half a million visiting last year, the guide says. Its promotional materials show several top state leaders had visited in recent years, and were impressed by Mengniu's modernisation drive.

It says about 10,000 cows are raised at the farm - compared with 900,000 cows in Hohhot. So only one out of 90 cows has the chance to be fed at the model dairy park. Most of the city's cows are housed in the ragged backyards of local dairy farmers. Several depot owners scoffed at the idea that Mengniu's high-end liquid milk brand Telunsu was guaranteed to be of high quality since it was produced in the park.

Yu Lijun , a contracted supplier to Mengniu, said: 'They ask me to send my milk in Telunsu containers whenever they run out of milk there.