(Photo : Yashili)

Just a few weeks after New Zealand's Fonterra got entangled with milk powder contamination issues in China, Chinese instant formula maker Yashili said it will be proceeding with its plant to build a milk processing plant in Pokeno.

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Yashili made the announcement after New Zealand's Waikato District Council signed an approval notice for the Chinese company's $171.03 million milk processing plant.

Aside from building the plant, Yashili will also run the plant located in the island town of Pokeno, which is just south of Auckland. The total investment covers costs on acquiring land, constructing the plant, and initial working capital.

Timely Approval

The milk plant is very timely as Chinese consumers continue fear buying some of Fonterra's milk products due to the botulism scare that the milk company said was not actually proven.

Some of Fonterra's milk products in China was recalled due to the contamination issue and the company said it is conducting thorough investigation.

A South China Morning Post report also revealed that Fonterra milk products did not show sign of botulism contamination following the conduct of new tests.

New Zealand's Ministry for Primary Industries said a series of examinations showed that the milk products were not contaminated with the potentially fatal clostridium botulinum but a harmless soil-dwelling bacteria called clostridium sporogenes.

3 Years To Carry Out Plan

Meanwhile, the go signal from the Waikato District Council was the last approval that Yashili needed to begin construction of the milk processing plant. In April, the privately-owned company received the approval of the New Zealand Overseas Investment Office.

Yashili's Chairman Zhang Lidian said the company now has three years to carry out its plan to build the processing plant that will be capable of processing up to 52,000 tons of finished and semi-finished products by the end of this year.

Yashili is in a take-over deal with China Mengniue Dairy, which announced this month that it will buy 75 per cent stake in the Guangdong-based infant formula and soymilk products company.