The owner of a poultry feed company in Shenyang, Liaoning province, has been arrested after admitting he used melamine in the production process, which led to the contamination of eggs sold by the Hanovo Group, police said at a press conference on Tuesday.

A spokesman for Shenyang police said Gao Xingtao, head of the Mingxing feed factory, had been arrested, but did not specify the exact date, the Xinhua News Agency reported on Wednesday.

Gao admitted to the purchase in July of 45 tons of protein products containing melamine that was added to the feed instead of the usual corn ethanol, which was in short supply, the report said.

The protein mix was used in the production of 287 tons of chicken feed, 212 tons of which was sold to Dalian Hanovo Enterprise Group, the firm that supplied contaminated eggs to Hong Kong in September.

Liu Kejun, a press officer with the police bureau told China Daily yesterday that the remaining 75 tons of tainted feed had been destroyed.

"The case is still under investigation," he said.

After the discovery of the contaminated eggs in Hong Kong, others containing high levels of melamine were also found on sale in Hubei and Shanxi provinces.

On Sunday, the Ministry of Agriculture said it had sent more than 369,000 inspectors to 250,000 feed producers across the country, which led to the closure of 238 illegally operating firms.

Meanwhile, as of Sunday, about 130 milk producers remained closed as a result of the melamine dairy scandal, the Ministry of Industry and Information Technology said on Wednesday.

Zhang Li, director-general of the consumer goods industry department, said: "That means about 20 percent of dairy producers in China are inoperable compared to Oct 2 when 32 percent were closed."

The task to regulate the milk industry remains tough as some dairy producers lack adequate testing equipment partly because of costs, he said.

Despite the rising production costs, restoring market confidence is still key, he said.

(China Daily November 6, 2008)