Security staff try to keep order as families with children who are undergoing medical checks for possible kidney stones wait to be seen at a hospital in Chongqing municipality on Sept 19 2008.
Security staff try to keep order as families with children who are undergoing medical checks for possible kidney stones wait to be seen at a hospital in Chongqing municipality on Sept 19 2008.

China milk recall spreads



SHIJIAZHUANG // China's food safety crisis widened after the industrial chemical melamine was found in milk produced by three of the country's leading dairy companies - prompting stores, including Starbucks, to take milk off their shelves. China's national product safety agency said all batches of milk that tested positive were being recalled, and by today the dairy sections of many grocery stores were empty in Beijing and Shanghai.

The recalls come as evidence is mounting that adding chemicals to watered-down milk was a widespread practice in China's dairy industry. The chief financial officer of one of the companies, Mengniu, apologised yesterday for the tainted milk. But he insisted only a small portion of the company's inventory had been contaminated and said the tainted milk came from small-scale dairy farmers. "Large-scale milk farms are very disciplined. They won't take the risk to do something like that," Yao Tongshan said in Hong Kong.

Mr Yao sipped from a carton of milk in a display meant to bolster consumer confidence. The crisis was initially thought to have been confined to tainted milk powder, used to make baby formula, that has been blamed in the deaths of four infants and for sickening 6,200 other children. But tests found melamine, a chemical used in plastics and fertilisers, in samples of liquid milk taken from China's two largest dairy producers Mengniu Dairy Group Co and Yili Industrial Group Co, as well as Shanghai-based Bright Dairy.

They join the discredited Sanlu Group, whose tainted milk powder and infant formula touched off public complaints. The apparently widespread contamination has rapidly become a political headache for a communist government that hoped to be basking in popular adulation over last month's successful Beijing Olympics. Instead, the government is being forced to scramble to regain public confidence. President Hu Jintao, in an address to senior Communist Party members, excoriated local officials for risking the public trust.

"Some officials have ignored public opinion and turned a blind eye to people's hardships, even on major problems that affect people's lives and safety," Mr Hu said yesterday in a largely dry policy speech published today in state newspapers. Also yesterday, the state council ordered hospitals to provide free treatment for sick infants and local officials to redouble efforts to remove all tainted products.

Companies found to have produced contaminated milk will later have to reimburse the government for medical expenses, the council said. * AP

'The Last Days of Ptolemy Grey'

Rating: 3/5

Directors: Ramin Bahrani, Debbie Allen, Hanelle Culpepper, Guillermo Navarro

Writers: Walter Mosley

Stars: Samuel L Jackson, Dominique Fishback, Walton Goggins

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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UAE squad to face Ireland

Ahmed Raza (captain), Chirag Suri (vice-captain), Rohan Mustafa, Mohammed Usman, Mohammed Boota, Zahoor Khan, Junaid Siddique, Waheed Ahmad, Zawar Farid, CP Rizwaan, Aryan Lakra, Karthik Meiyappan, Alishan Sharafu, Basil Hameed, Kashif Daud, Adithya Shetty, Vriitya Aravind

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The biog

First Job: Abu Dhabi Department of Petroleum in 1974  
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work