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One trashed brand becomes another company's treasure

Once synonymous with contaminated milk, the Sanlu brand is getting a second chance - this time reborn as a trademark for organic grain products.

Sanlu was a household name in the nation's dairy industry and an iconic brand of Hebei-based Sanlu Group Co, one of China's leading sellers of milk powder for 15 years.

Then the company was implicated as one of the major culprits melamine adulteration scandal that broke out in September 2008.

That year milk powder contaminated with melamine to increase protein content left at least six Chinese infants dead and almost 300,000 with kidney illnesses.

When the company announced bankruptcy about six months later, its assets were auctioned, including the company's four plants as well as the Sanlu brand and related trademarks.

An entrepreneur from Zhejiang province bought these protected trademarks for nearly 8 million yuan ($1.32 million) and then established Zhejiang Sanlu Industrial Co Ltd.

After more than four years of research and development, the company now produces organic coarse flour, noodles and grains.

Yang Xiangdong, the company's marketing manager, told China National Radio that the main aim of purchasing the Sanlu trademark is to protect a national brand.

"The scandal is in the past," he said. "Sanlu, which existed as a national brand for over a decade, should not vanish, and we hope that our company can endow the brand with an entire new interpretation by providing pollution-free and high-quality coarse food grains."

He also said that the company would learn a lesson from the toxic milk powder scandal by strictly controlling sources to ensure safety throughout the production chain, according to a report from Beijing Business Today.

Given the increasing number of registered trademarks in China, only a few brands can be easily recognized by customers, said Jian Aihua, a food researcher from professional Chinese industry research and investment consulting company CIConsulting.

The value of the Sanlu brand may recover as the scandal gradually fades from the public memory, Jian said.

Zhang Shuting, head of the Business Brand Institute affiliated with China Communication University, is not as optimistic as Yang and Jian.

"The Sanlu brand carries many negative connotations that cannot be shed in the short term. Any company selling new products with this trademark is taking a huge risk," he explained.

Many Sina Weibo users also say they will not buy the new coarse grain products because they immediately associate the brand with the scandal.

But others suggested giving the company a chance because the fact that it is bold enough to use a trademark with such negative associations shows it has confidence in its products.

Experts say recognition and success will depend on how hard the company works to build its reputation and offer customers good value.

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