In early December, Sanyuan set up a wholly owned subsidiary in Shijiazhuang with 5 million yuan ($731,700) investment to help business expand. On December 29, Sanyuan agreed to rent some assets from Sanlu and signed rental contracts. A subsidiary of Sanyuan will be allowed to use manufacturing assets in six key Sanlu plants to produce dairy products. Sanyuan has pledged to help those companies to return to production and business soon. Spokesman for the Shijiazhuang City Government Wang Jianguo said the move aims to prevent Sanlu's assets from devaluation as the dairy maker is undergoing bankruptcy proceedings. It also hopes to protect the benefits of employees and farmers.

Compensation

On January 1, 2009, millions of mobile phone users in China received a text message sent by 22 dairy companies implicated in the tainted milk scandal. "We are deeply sorry for the harm we have brought to children and to society," the message read. "We offer our sincere apology and plead for forgiveness."

On the same day, Ministry of Health Spokesman Mao Qun'an promised that the country will continue to provide free treatment to babies made sick by tainted milk powder.

"Children below three years of age, who consumed tainted milk and have symptoms of ailments, can still go to local hospitals for check-ups. They will receive free treatment if diagnosed with stones in their urinary systems," said Mao.

The firms also promised to compensate victims and cover all expenses for their medical treatment in the text message.

On December 29, 2008, the 22 companies involved in the scandal established a compensation fund for the victims. They gave more than 1.1 billion yuan ($161 million) to compensate victims, including over 900 million yuan ($132 million) in cash compensation for sick babies, and another 200 million yuan ($29 million) to set up the fund, which is managed by China Life, the country's biggest life insurer.

The compensation fund will pay for medical costs incurred up to the age of 18 for children made ill by tainted milk. Medical costs arising from the tainted milk can be reimbursed at local branches of China Life. Claims have to be accompanied by a medical diagnosis to prove that the related illness is linked to kidney problems caused by the melamine-tainted dairy products.

Parents of victims will also receive one-off compensation. The compensation fund divided victims of the tainted dairy products into three categories: Death, serious illness and common symptom. Earlier media reports said families of babies killed in the scandal will each receive 200,000 yuan ($29,000), and seriously ill babies will get 30,000 yuan ($4,400).