More assets of the Sanlu Group, the bankrupt Chinese dairy company at the center of the melamine contamination scandal, will go on sale at two auctions in the northern city of Shijiazhuang this week, an auction house said on Monday.

The assets to go under the hammer on Tuesday will include Sanlu's shares in four dairy plants as well as 169 of its protected trademarks and 12 patent rights, said a spokesman with the Hebei Jiahai Auction Co. Ltd.

Another auction will be held on Thursday to dispose of Sanlu's shares in two other dairy plants, the spokesman said.

With government backing, Beijing-based Sanyuan Group successfully bid 616.5 million yuan (US$90 million) to buy Sanlu's core assets on March 4.

Sanyuan had said it would continue to bid for other assets of Sanlu, but it issued a statement on Saturday saying, "The company has no intention of buying other bankrupt assets of the Sanlu Group at present."

Sanlu Group, which was based in Shijiazhuang, Hebei Province, had been China's leading seller of milk powder for 15 years until the melamine adulteration scandal broke in September last year. The group's revenue hit 10 billion yuan in 2007, while Sanyuan's revenue was only 1 billion yuan.

The company's tainted baby milk powder was found to have caused the deaths of at least six children and sickened more than 300,000 others.

Many dairy producers eyed Sanlu's assets after it was declared bankruptcy on February 12.

However, the first auction required bidders to meet two criteria: no involvement in the melamine scandal; and a minimum of 1 billion yuan in total revenue from liquid milk and milk powder product sales last year.

Both of China's leading dairy producers, Yili and Mengniu, were unqualified to bid, since the industrial chemical melamine was found in their products, though in smaller proportions than in Sanlu's products.

The auction house has said no special restrictions would be applied to bidders for the latest auctions.

(Xinhua News Agency April 7, 2009)