What is melamine, and why add it to milk?

A Chinese court on Thursday sentenced two men to death for their role in making and selling milk tainted with melamine. The chairwoman of the Sanlu Group, the dairy company at the heart of the scandal, was given life in prison.

At least six children died and nearly 300,000 fell ill after drinking the toxic dairy products last year.

Here are some questions and answers on the scandal:

WHAT IS MELAMINE?

-- A white powder used in plastic-making. It was first synthesised by a German scientist in the 1830s.

WHAT IS IT USED FOR?

-- Its most common form, melamine resin, a mix of melamine and formaldehyde, is used in the manufacture of formica, floor tiles, whiteboards and kitchenware.

WHY ADD MELAMINE TO MILK POWDER?

-- Melamine is rich in nitrogen, and relatively cheap. Adding it to sub-standard or watered-down milk makes the milk's protein level appear higher. Standard quality tests estimate protein levels by measuring nitrogen content.

WHO WAS AFFECTED BY THE TOXIC MILK?

-- At least six infants died in China, and about 300,000 more were hospitalised after drinking the contaminated milk.

-- More than 80 percent of the sick children were under two years old. Young babies that depend solely on milk were most vulnerable.

WHO ADDED THE MELAMINE TO THE MILK?

-- Unscrupulous middlemen working at the "milk stations" that sold milk from farms to dairy companies were identified as the main culprits by initial investigations.

WHICH COUNTRIES IMPORTED THE TAINTED MILK?

-- More than 20 mostly Asian and African countries and regions -- Bangladesh, Bhutan, Britain, Brunei, Burundi, Canada, China, France, Gabon, Ghana, Hong Kong, India, Japan, Malaysia, Myanmar, the Philippines, Singapore, South Korea, Taiwan, Tanzania, Togo, Vietnam, and Yemen -- either pulled products off shelves, banned Chinese dairy imports, or stepped up tests in the wake of the scandal.

WHICH COMPANIES WERE IMPLICATED?

-- 22 Chinese companies were named as having sold tainted dairy products. Sanlu Group, China's top seller of infant milk powder, was the first to go public with melamine contamination. See FACTBOX [ID:nPEK20969] for the complete list.

-- New Zealand dairy export giant Fonterra Co-operative Group Ltd has a 43 percent shareholding in Sanlu, but has completely written off its NZ$201 million ($107.1 million) investment in the Chinese firm.

Source: Reuters (Writing by Gillian Murdoch; Editing by Ben Blanchard and Dean Yates)

Bangladesh Dec remittances up 20.5 pct on year

DHAKA, Jan 11 (Reuters) - Money sent home in December by Bangladeshis working abroad rose to $765.79 million, up 20.5 percent from a year earlier, the central bank said on Sunday.

In July-December, the first half of the 2008/09 financial year, remittances from more than 5 million expatriate Bangladeshis totalled $4.5 billion, 31 percent higher than the same period of 2007/08.

In 2008, the number of Bangladeshis cleared for overseas employment exceeded 875,000 against 832,000 in 2007, according to the Ministry of Expatriates' Welfare and Overseas Employment.

The central bank expects remittances to reach $10 billion in the current financial year.

However, some analysts say the inflow of remittances may slow down as the global credit crisis and recession in the developed world put jobs at risk.

The central bank said remittances would be affected only if instability in financial markets persists for long.

Expat income, a key source of foreign exchange for the impoverished south Asian country, hit a record $7.91 billion in the 2007/08 financial year, nearly a third higher than the previous year.

Strong remittances also helped offset the impact of the trade shortfall and kept the overall balance of payments in surplus.

The bulk of remittances came from Saudi Arabia followed by the United States, the United Arab Emirates, Kuwait, Britain, Qatar and Oman.

Remittances are Bangladesh's second-biggest source of foreign income after ready-made garments, which earned $10.7 billion in the 2007/08 fiscal year.

Banks make record operating profit despite global recession

In spite of the collapse of many banks in the United States and Europe amid global financial meltdown, the country's private commercial banks (PCBs) attained higher operating profit in 2008.

The initial figures of operating profit of at least 10 PCBs indicated that they have earned profits in 2008 following higher import payments and enhanced credit flow to the private sector.

Sources at Bangladesh Bank said that the PCBs were able to maintain upward trend of operating profit last year owing to the increased credit flow to the private sector as well as import payment growth.

The country's banking sector remained insulated from the global recession, the source further said.

According to a senior official of the central bank, most of the third and second generation banks could not achieve their internal operating profit target due to raising cost of funds for increasing the interest rates on deposit.

The operating profit does not indicate the real financial picture of the banks, as they have to leave aside provisioning against bad debts and taxes that are paid to the government from the operating profit.

According to the information provided by the Offsite Supervision Department of Bangladesh Bank, Islami Bank Bangladesh Ltd made the highest amount of operating profit of Tk 630 crore in 2008, which was Tk 416 crore in 2007. Other banks which earned the operating profits are: Prime Bank Ltd Tk 480 crore, Pubali Bank Ltd Tk 365 crore, National Bank Ltd Tk 352 crore, EXIM Bank Ltd Tk 270 crore, United Commercial Bank Ltd Tk 260 crore, Dutch-Bangla Bank Ltd Tk 218 crore, Mutual Trust Bank Ltd Tk 123 crore, Trust Bank Tk 135 crore, NCC Bank Ltd Tk 233 crore, Shahjalal Islami Bank Ltd Tk 207 crore, Commerce Bank Ltd Tk 18 crore, Al-Arafah Islami Bank Ltd Tk 158 crore, BASIC Bank Ltd Tk 174 crore, City Bank Ltd Tk 160 crore and Social Investment Bank Ltd Tk 100 crore.

The operating profit of the 28 PCBs out of a total of 30 increased by nearly Tk 1404 crore to Tk 5138 crore in 2007 calendar year, from Tk 3734 crore in 2006, banking sector sources said.

The country's imports grew by 31.66 per cent during the first four months of the current fiscal over that of the corresponding period of the previous fiscal, the central bank officials said.

The value of letters of credit (LCs) against imports worth $7.898 billion was settled during the July-October period of the 2008-2009 fiscal compared with $5.999 billion in the same period of the previous fiscal, according to the central bank statistics.

On the other hand, credit to the private sector rose by 24.72 per cent to Tk 397.36 billion in October last from 16.19 per cent to Tk 223.99 billion of the corresponding period of the previous year, the central bank's data showed.