Fonterra has stated that it is not looking to sell its stake in San Lu in the wake of the Chinese company’s involvement in the contaminated milk scandal.
Fonterra owns 43% of San Lu, which produced poisonous milk powder.
Reuters had reported that Fonterra is in talks on San Lu’s future and is considering selling its stake.
But a Fonterra spokesman said the dairy cooperative is committed to doing business in China.
San Lu waited five weeks before going public after discovering its baby formula had been deliberately contaminated with the toxic chemical melamine by Chinese milk suppliers.
The company said talks with San Lu are focusing on all facets of its Chinese operations.