New Zealand dairy giant Fonterra has announced that it will resume its Sri Lankan operations after temporarily suspending work and plant processing for the safety of its employees.

Fonterra closed down its Colombo headquarters in Sri Lanka and told its 755 employees to go home after supporters of a political party with government affiliations protested in front of the company's office. Protesters brought banners telling the company to remove its "contaminated" milk products in the market. The angry mob accused the company of selling tainted milk.

Fonterra CEO Theo Spierings said in a statement posted on the company website that the local workers in the Sri Lankan officers are safe to return to work. The Sri Lankan branch was declared ready for business. Mr Spierings said Fonterra will continue to serve its customers in Sri Lanka and sell them high quality milk.

In the early weeks of August, Fonterra issued a recall on its infant formula after announcing that it has discovered its whey protein concentrate used in some milk products was contaminated with botulism bacteria.

A trade union was granted a court order to force New Zealand's Fonterra to stop selling and advertising its milk products in Sri Lanka after the Health Ministry tested some of the imported milk and discovered traces of dicyandiamide (DCD).

Sri Lankan health authorities have asked Fonterra to remove tainted milk products from the market and the company said it has complied with the request.

Meanwhile, the price of Fonterra's NZX-listed units went up 3.2 per cent or $7.10 after the company retested its alleged contaminated whey protein concentrates and found the botulism scare to be a false alarm.

Fonterra units gave its investors access to the company's dividends. At $7.10, the price was just less than 2 cents before the botulism scare has gone public on Aug. 3.

The Ministry for Primary Industries has received the test results that said no botulism bacteria was discovered in the whey protein concentrate produced by Fonterra. It was not the feared botulism -causing clostribdium botulinum but clostridium sporogenes which does not produce toxins that trigger botulism.

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