The MOU creates a new Joint Venture (JV) that has as the stated objective to explore the feasibility of jointly building and managing a 600,000 tonne food canola crush plant located in Western Canada.
CGG agrees to commit to purchase all oil output/off-take of the JV. CPOW will purchase all meal output/off-take of the JV. CPOW will secure required input seed from western Canadian producers by contracting with producers to provide the input required for the Joint Venture. The JV has agreed to appoint CPOW as the manager, with responsibility for the design and construction of the crush plant. The JV said the plant will be constructed in compliance with Canadian legal, environmental and safety rules, regulations and statutory requirements. The signatories to the MOU were Mr. Shenher, chief executive officer of Clean Power and Mr. Hu, Secretary of the Party Committee and President of Chongqing Grain Group Co., Ltd. The final structure of the JV has not yet been determined, but CGG will be the majority owner.
"Our partners in China have immediate demand for the planned capacity of the new canola plant,” Shenher said. “The site while not yet selected will be situated close to railway transportation transit points available in Western Canada to ensure logistical efficiency. We are excited about the demand existing in China for canola oil and world wide for off-take canola meal. We look forward to a long successful future with our partners in China as we work to fulfill their demand."
The Chongqing Grain Group Co., Ltd. is located in Chong Qing, municipality in China. The Group owns 51 subsidiaries and has 21,507 employees. Total assets of the group have reached approximately $920 million.