Chemical manager: "Industry is uncontrolled"

SHIJIAZHUANG, China — As China's chemical industry began to take off in the late 1990s, so many factories were eager to get into the business that it created excess supply of certain substances.

The use of industrial ingredients in food did not start with melamine. When Chinese authorities began spot inspections as part of the crackdown in 2007, they found that poisonous dyes, mineral oils derived from the processing of petroleum, paraffin and other chemicals were being used to make candy, pickles, crackers and seafood.

The excess melamine supply peaked in 2006, and soon the melamine was coming to China's dairy-producing regions by the truckload.

Some dealers bought professional-quality melamine from chemical factories at almost $1,500 a ton.

Others bought melamine scrap, a byproduct from other processes and potentially even more hazardous when added to food products, for less than $50 a ton. It wasn't long before a group of middlemen, led by engineers, emerged to help market the scrap.

They had no trouble finding customers.

Jia Yazhou, a manager at a chemical company, said that last year he received several phone calls from people interested in buying melamine scrap.

"They said they would use it to make animal feed directly," said Jia, who works at Huixin Chemical, in Shijiazhuang's Wuji county. Jia said he refused, saying that his factory recycled the scrap and that he "didn't know what price to offer."

But he wasn't surprised by the calls. "The industry is so uncontrolled," he said.

Other sales managers at a chemical plant said they didn't dare ask why customers, including a large fish farm, wanted the melamine scrap.

"I don't know if my customers tell me the truth or not. I didn't ask for what purpose they buy it," said Liu Qiujiang of Jinglong Fengli Chemical in Hebei's Ningjin county.