Viterra said planning to build China canola crusher

* Chinese port would have controlling share

* Plant would crush 600,000 tonnes/year

* Gives Viterra foothold in China-analyst

By Niu Shuping and Rod Nickel

BEIJING/WINNIPEG, Manitoba, April 16 (BestGrowthStock) –
Canada-based grain handler Viterra Inc (VT.TO: ) (VTA.AX: ) and a
Chinese port authority are planning to build a canola-crushing
plant in China’s Guangxi region, according to a local
government agency in the region.

The Guangxi Development and Reform Commission approved
plans in February for a $49.8 million canola plant that would
be 51-percent owned by Fangchenggang Port Group Co Ltd and
49-percent owned by Viterra Asia Pte, which is Viterra’s office
in Singapore, according to the commission’s website.

The plant would crush 2,000 tonnes of canola seed per day
for oil and meal, with an annual capacity of 600,000 tonnes of
seed. Canola oil is used in cooking and biofuel, while the meal
is a protein source in livestock feed.

A Viterra spokesperson said on Friday that the company is
“looking at an opportunity in the region”.

An official at Fangchenggang said the project would come on
stream in 2011, with design and land acquisition now under
way.

Viterra is the top grain handler in Canada, which is the
world’s leading canola exporter.

Fangchenggang is a coastal city in southern China near
Vietnam.

Viterra moved aggressively into Southeast Asia last year
when it bought Australia’s ABB Grain, giving it the ability to
acquire grain in both the Northern and Southern Hemispheres.

Last year, China restricted Canadian canola with blackleg
disease to certain ports away from Chinese rapeseed growing
areas. China, which was Canada’s top canola seed export market
in 2008-09, is poised to ban all blackleg canola from Canada at
the start of the 2010-11 crop year on Aug. 1.

It also restricts Australian canola with blackleg.

The Guangxi region doesn’t grow much rapeseed, so Viterra
is likely planning to crush Canadian- and Australian-origin
canola, which is a variant of rapeseed, at the new plant, said
Don Roberts, analyst at Canolainsight.com in Vancouver, British
Columbia.

It’s not clear if the Chinese government has approved
imports of blackleg canola through Fangchenggang.

It’s unlikely that Viterra would build a plant in China
simply as a hedge against the import restrictions continuing,
Roberts said, because China is widely expected to lift them
once it needs to buy canola again.

However, building a plant is a way to get established in
China, he said.

“I think they’re just looking for a way to get in there.
They can get a handle on what’s happening over there because
they’re connected.”

Stock Market News

(Editing by Peter Galloway)

Viterra said planning to build China canola crusher