The fallout from the recent 'DCD' milkpowder scandal is continuing, with the Chinese government announcing tough new regulations on dairy product imports.
But the scandal has not discouraged Yashili International - one of China's biggest infant formula producers - from deciding to build a milk processing plant in Pokeno in Waikato.
"They have got a very high regard for the product they get from New Zealand, and for the quality systems and expert certification systems and the various [other] systems that exist in New Zealand," says Terry Norwood of Yashili New Zealand.
The Chinese government doesn't feel the same. Chinese state media says from May 1, there will be tough new regulations on the import and export of dairy products, due to a series of recent accidents, including contaminated milk power from New Zealand.
News that residual traces of the chemical DCD had been found in some Fonterra milk powders went worldwide, but the New Zealand Government said the DCD carried no safety risk and isn't worried by China's new rules.
"In fact, we've spent quite a lot of time with the Chinese government, trying to improve their safety standards in their agriculture sector and other part of their food production chain," says Prime Minister John Key.
But exporters say the mud from DCD scandal has stuck.
"We lost an order yesterday that was in the pipeline and they've asked for their deposit back," says Graeme Clegg of New Image Group. "They just said, while this controversy is on, it's not a good time for them to proceed."
Yashili , though, is more than happy to profeed. In fact, they're the second Chinese company with plans to make infant formula in New Zealand, a move tha could provide the people of Pokeno with nearly a hundred extra jobs.