Fonterra stops operations at Sri Lanka plants after food safety protests

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Fonterra stops operations at Sri Lanka plants after food safety protests

(Xinhua) 17:53, August 23, 2013

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New Zealand dairy giant Fonterra on Friday suspended operations at its plants in Sri Lanka and told 755 staff to stay home, saying the situation there was " unstable" after protests over the regulation of its products.

"The temporary suspension is the right thing to do. It is a precautionary measure to ensure our 755 people working there are safe. We have closed our plants and office in Sri Lanka, and have asked our people to stay at home," Chief Executive Theo Spierings said in a statement.

"At the same time, we must do all that we can to protect our farmer shareholders' investment in Fonterra's Sri Lanka manufacturing and commercial operations."

Fonterra had provided every possible assurance to the Sri Lankan authorities about the safety and quality of Fonterra's products, and remained committed to the Sri Lankan people, he said.

"Recent events, however, have made it difficult to maintain day- to-day operations, and we need to get them resolved."

Fonterra Sri Lanka was currently subject to a court enjoining order, which had stopped the company selling and advertising its products and from making any public statements with customers or consumers in Sri Lanka.

Fonterra was fighting the order in the courts, and working with Sri Lankan and New Zealand government officials on a "long-term sustainable solution," Spierings said, adding Sri Lanka was a key market for the New Zealand dairy industry.

Radio New Zealand reported that a union in Sri Lanka had succeeded in having the ban introduced after alleging Fonterra products were tainted with the agricultural chemical DCD.

The suspension came the same day that Fonterra reported that it had achieved record sales and revenues on its two GlobalDairyTrade (GDT) commodity auctions in August despite revelations of two international food safety alerts involving Fonterra products.

Fonterra achieved its highest-ever monthly revenue from GDT in August, selling 109,664 metric tons of products worth 685 million NZ dollars (536.49 million U.S. dollars).

Early this month, Fonterra revealed it was recalling whey protein concentrate that had been contaminated in May last year with a bacterium that can cause botulism.

New Zealand's Ministry for Primary Industries and the government are conducting investigations into the cause of the contamination and how the company handled it.