Quick turnaround helped open up Chinese market

Milk Powder

Melamine is a substance that, when combined with formaldehyde, forms melamine resin, which is used in laminates that include flooring, Formica and dinnerware. It is toxic enough that chronic exposure to humans via ingestion might cause cancers as well as damage to the human reproductive system. It is a substance that has no place in the food chain and when it does, can have catastrophic results.

In 2008, distributors in China were found to have added melamine to baby formula, which resulted in the deaths of six babies and the hospitalisation of more than 54,000 others. The resulting inquiry by Chinese authorities led to prison for some perpetrators and, in the most severe cases, two death sentences. It also had a huge effect internationally on China’s reputation as a food stuffs manufacturer.

With this as background, it was of no surprise that when Camperdown Dairy International decided to enter the Chinese milk powder market it needed to make sure it had the best available advice and practices to export to an ever-growing and lucrative market.

In order to get a Certification and Accreditation Administration of China (CNCA) certificate to send their product overseas, Camperdown Dairy International needed to put excellent traceability and authentication processes in place. All within an eight-week period. It turned to the family-owned, Australian product ID, inspection and traceability specialist, Matthews Australasia.

“Camperdown went to market looking for an identification/traceability company that could support them,” said Matthews Australasia CEO Mark Dingley. “They were looking to get into the Chinese market for nutritionals, mainly infant formula. At that stage they were a new business looking for a company that could support them based on the requirements of the CNCA Chinese licence requirements, which required traceability.”

To help Camperdown get over the line in the tight timeframe, the companies shared the risk in a partnering spirit rather than Matthews working just as an “arms-length” equipment supplier. This meant deciding together what was needed to meet the standards that the Chinese authorities had put in place.

Matthews Australasia offers hardware and software solutions in the automation and process control space. A key ingredient for Camperdown was traceability and the ability for consumers to know that the product they were buying was not only what it said it was on the labelling, but the knowledge they were buying something that hadn’t been tampered with on the way to the shop’s shelves.

Matthews developed the solution by using a cloud-based platform that provided advanced cryptographic code-generation and a fraud-tracking algorithms, as well as a consumer-interface to track where the product was scanned.

The solution used a Matthews’s Solaris laser to mark each tin with a unique, serialised QR code, generated by the cloud-based provider. Matthews’s production-line software, iDSnet, integrated with the code provider and the Solaris laser scribing system on the production line, provides the customer with an end-to-end solution.

“We were in constant contact with Camperdown,” said Dingley. “In particular on the ability to package and do the laser marking on the tins, as well as the software solution. We partnered with a company called Trust Codes, which allowed us to do the cloud-based authenticity aspect of the project.”

One of the biggest challenges was the aforementioned turnaround time.

“It was a short lead time because once Camperdown had gained Chinese Government accreditation, they couldn’t manufacture without this solution, so the timeframes were challenging and everyone was under a lot of pressure,” said Dingley. “However, we worked very well together to get a solution that has really set Camperdown up as they launched the business in China and other parts of the world. It was an incredible turn around to go from concept to inline printing and validation of the codes. What set us apart was that we were a one-stop-shop and we were able to effectively go from concept to live production within eight weeks.”

One of the immediate problems they came up against was how the system could be integrated so that consumers could easily use it. China has some strict regulations about social media, which was seen as the ideal platform. However, although the likes of Facebook, Instagram and Twitter are subject to the local censorship laws, China has its own social media outlet called WeChat, which has an inbuilt QR code reader. Using smartphones, consumers in China can scan the QR codes via WeChat on individual formula tins to identify and authenticate the individual product and see its history. Scanned information also shows key data about the company and brand, Australian dairy products, and how best to consume the product.

A couple of key outcomes for Matthews were that it showed that they could turn around a solution very quickly and also where the iDSnet software product was heading over the next few years.

“This project challenged us on a number of levels in a positive way,” said Dingley. “It gave us an insight as to where our software is going in the future, which is around that track-and-trace authenticity that is required with FMCG manufacturers as they look to export into Asia, and China in particular. This is especially true if it is food or baby formula where there is a high demand for anti-counterfeit, traceability and authenticity solutions. It certainly set up our software and integration with our hardware and customer interfaces to provide that full solution that we know our customers are looking for.”

Matthews owns the intellectual property for iDSnet. The software is now in more than 200 companies across Australia. Its capabilities include things as simple as central management of date code formats, through to running multiple production lines across several sites, through to what this project encapsulated, which was a serialisation solution to manage the Chinese regulations and provide an anti-counterfeit solution. How hard was it to get past the Chinese regulations and find the right solution?

“The Chinese CNCA guidelines spell out quite clearly the requirements,” said Dingley. “It’s not a case of demonstrating a solution. It’s a case of anyone that has a CNCA requirement – like nutritionals or baby formula – needs to comply to it. Yes, you have to state the compliance level but the compliance is only brought into question if and when you need to use it. There is a level of self-regulating as well as providing Chinese authorities with enough details to demonstrate that the traceability regulations are in place.” Overall, Dingley said the company has found the experience to be a positive one. Not only has it given them a Zenith Award for Best Network Implementation, but also opened up other opportunities.

“Absolutely we’ve had other work as a result of this project,” said Dingley. “Matthews’ strength is in that connectivity between the production line and the hardware and the actual coding. Our experience on the production line, together with our in-house software capabilities, provides us that unique joining of the two. From a package code management point of view, it is quite unique in Australia.”