The liver synthesises red blood cells in the fetus. After birth, red blood cells are synthesised in the bone marrow and old cells are broken down and recycled in the liver.Bile is produced by hepatocytes and contains bilirubin a breakdown product of haemoglobin. Bile is composed of 97% water, bilirubin (bile pigment), bile salts and fats including cholesterol, fatty acids and lecithin - an emulsifier. The liver also synthesises fatty acids and cholesterol and bile salts are made from cholesterol.Bile is released into the canaliculi which join to form the bile duct which transports bile to the gall bladder where it is stored.