DUTCH LADY DOESN'T EXPECT NEGATIVE IMPACT ON SALES, SAYS MD

PETALING JAYA, Sept 24 (Bernama) -- Dutch Lady Milk Industries Bhd, one of Malaysia's leading dairy companies, does not expect any negative impact on its earnings or dividends following the tainted milk scandal in China, managing director Hans Laarakker said Tuesday.

"We believe that with the strong brand (already here for 50 years) that we
have and also the measures being taken, we don't expect any negative impact on
sales or our market share," he told a media briefing.

The media briefing came after its counterpart in Singapore, Friesland
Foods Singapore, withdrew from the market all its Dutch Lady sterilised milk
products packed in one litre and 250ml bottles manufactured in China.

"Within Dutch Lady Malaysia, there are no Dutch Lady products or dairy raw
materials sourced from China. Whatever is being distributed within Malaysia is
manufactured locally or mainly sourced from The Netherlands, Australia and New
Zealand," Laarakker stressed.

Dutch Lady Malaysia manufactures and distributes milk products ranging from
infant formula, growing up milk powder, UHT (ultra high temperature) milk,
sterilised milk and pasteurised milk to yoghurt products.

On the withdrawal of Dutch Lady's strawberry flavoured milk in Singapore,
Laarakker said: "It was an isolated case where the strawberry flavoured
sterilised milk in plastic bottle was tested and found to contain melamine as it
was produced in China."

He however reassured that strawberry flavoured milk in boxes was safe to
drink and 95 per cent of Dutch Lady products in Singapore came from
Malaysia.

"As a precaution, all sterilised products from this factory in China have
since been withdrawn from the Singapore market," he said.

Laarakker urged consumers to start reading labels on every food item for
self-assurance and to check where the products originated from.

"This press conference is to make sure the Malaysian consumers are informed
properly what is the facts and I'm sure within a couple of days, it will restore
consumer confidence to a normal level.

"At this moment, we don't see any slowdown in sales or any negative
effects," he said.

On Dutch Lady's share prices reacting downwards recently, Laarakker said:
"it is a natural tendency for investors to take precaution. It is very much a
normal reaction."

Dutch Lady's share was up 40 sen Tuesday to close at RM11.

On whether Dutch Lady was planning a price increase for its products
following a possible price hike on raw materials, Laarakker said: " In the past
one-and-a-half-year, Dutch Lady has been very moderate with increasing prices.
We have been very responsible in increasing prices and we keep it to a minimum."

He said the company did not expect an immediate increase if prices of raw
materials went up, adding that the company would view it from the raw material
perspective.

Elaborating, Laarakker said due to the tainted milk problem in China,
the Chinese are likely to start importing more milk powder instead of using its
local fresh milk.

"If China starts buying more milk powder from the world market because they
don't trust the local fresh milk anymore, that could result in a temporary and
high price level in the world market.

"However, we don't expect a significant effect on consumer prices," he
added.
-- BERNAMA