September 9/Qingdao, China, & Rockville, Md./Business Wire -- Synutra International Inc. signed an agreement to sell three dairy farms and two milk processing factories in China. The buyer is Heilongjiang Wondersun Dairy Co. Ltd., which is paying an estimated $28.9 million for the assets.
The sale reflects Synutra's shift to imported sources of raw milk powder following the September 2008 discovery of melamine in products of 22 Chinese formula producers, including some lots of Synutra's U-Smart products. Following that incident and the subsequent product recalls, Synutra has been using imported milk powder from Europe and New Zealand in its U-Smart, Super and Helanruniu, or Holsteina series of powdered formula products. Synutra intends to continue using imported milk powder for these series of powdered formula products for the foreseeable future.