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Mattel to take a $30 million charge on recall of China-made toys news
03 August 2007

Mumbai: Mattel Inc., the world''s largest toymaker, will take a $30 million charge on recall of 967,000 Chinese-made toys amid concerns they may contain hazardous levels of lead paint.

The recall involves toys featuring licensed characters like `Elmo'' and `Dora the Explorer'' made between April 19 and July 6 and sold in its Fisher-Price unit stores the US, Mattel said.

The recall will mean a $30 million reduction in Mattel''s pre-tax operating profit, the company said in a regulatory filing. Mattel said the costs will be added to the second quarter revenues.

Mattel had reported second-quarter revenue of $1.02 billion, with $410.4 million coming from Fisher-Price.

El Segundo Calif.-based Mattel Inc. said of the nearly one million products recalled from the US market, about 30 per cent had reached store shelves.

The toys were made by a contract manufacturer in China for the company''s Fisher-Price unit.

The manufacturer used non-approved paint that may contain too much lead, which has been linked to many children''s health problems, including brain damage, according to US health authorities.

Mattel said it was reviewing procedures involving all of its Chinese-made products and that additional issues could surface in the future. Mattel is also expanding its testing programmes to ensure that painted toys from third-party manufacturers are safe before they are sent to customers.

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Mattel to take a $30 million charge on recall of China-made toys