① Chongqing Baiya Sanitary Products responded to the Exchange's inquiry letter, claiming no knowledge of the violations and no connection with the involved companies; ② stopped cooperating with recycling companies and began to destroy defective products independently; ③ however, the company did not clarify why its sanitary pads appeared in the news.
On March 20, Caijing News reported (by journalist Luo Yichen) that after experiencing the "defective sanitary pad renovation" controversy and a drastic drop in stock prices, Chongqing Baiya Sanitary Products (003006.SZ) stated in response to the Shenzhen Stock Exchange's inquiry letter that the company was unaware of the illegal activities regarding the renovation of sanitary pads, and the company has not participated in such illegal business.
The company also stated that it would strengthen the control over waste materials by ceasing cooperation with recycling companies and instead choosing to destroy defective products independently. As for why the sanitary pads produced by the company appeared in the news, Chongqing Baiya Sanitary Products has not announced the investigation results.
It is reported that this year’s 315 Evening Gala exposed Liangshan Xixi Paper Products Co., Ltd. (hereinafter referred to as "Liangshan Xixi") for buying defective products and production waste from manufacturers of diapers and sanitary pads, renovating them, and selling them for profit. In related news reports, Chongqing Baiya Sanitary Products' "Freedom Point" brand sanitary pads appeared among this pile of production waste. Moreover, Liangshan Xixi processed the non-renewable defective sanitary pads into recycled raw materials and resold them in the form of pulp.
In response to this matter, on March 16, the Shenzhen Stock Exchange quickly issued a letter requiring Chongqing Baiya Sanitary Products to conduct a self-examination and explain: 1. Is the company aware of or involved in the illegal activities mentioned in the reports? Is there any transaction or relevant, cooperative relationship with the involved illegal companies? 2. Are there any gaps in the company's raw material procurement and defective product disposal processes? If so, what rectification measures and actions to eliminate the impact does the company plan to take?
Chongqing Baiya Sanitary Products stated that the company was unaware of the illegal operations reported in the news and has no connection or cooperative relationship with the involved illegal companies. Regarding the raw material procurement process, Chongqing Baiya Sanitary Products mentioned that the company has a list of qualified suppliers and that the quality center inspects each batch of raw materials entering the factory according to the relevant technical standards of raw materials. Additionally, the company conducts performance tests on samples taken from each batch of products.
It is noteworthy that in the "defective sanitary pad renovation" incident, the main issue pointed to potential hazards in the handling process of defective products by sanitary pad manufacturers. In response to this issue, Chongqing Baiya Sanitary Products provided a more detailed explanation, stating that its original handling process for waste materials involved classifying and collecting waste from the production process in the workshop, transporting it to the waste area, crushing it, and then having a professional recycling entity process it. During this process, the company conducts irregular inspections of the records and handling of waste materials.
As for why the company's defective products appeared in the news, Chongqing Baiya Sanitary Products did not provide a conclusion from its investigation, indicating that the truth of the incident has not yet been ascertained. In its announcement, it stated that on the evening of March 15, the company immediately established a special team to carry out an investigation and reported to the public security authorities, while cooperating with local market supervision and administration departments to conduct an investigation.
Although the truth of the incident is still unclear, Chongqing Baiya Sanitary Products has strengthened the management and disposal of defective products. The company stated that it has enhanced its control over waste materials and has taken over the entire handling process of production defective products. It has stopped cooperation with professional recycling entities regarding the disposal of waste materials and will destroy production defective products using eco-friendly incineration and other methods, completely eliminating the possibility of their illegal recycling.
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