Canadian condo seller taps China edible oil demand
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - A Canadian company better known for selling condominiums has walked into a C$1 billion ($890 million) deal to ship edible oil to China as consumer demand there overtakes domestic supplies.
Fengguan Edible Oil Ltd Co, a Chinese producer of oil from rapeseed, contacted Toronto-based LeMine Investment Group this year about securing canola oil, a variant of rapeseed that is crushed for cooking, salad dressings and margarine.
This month, LeMine, which had been referred to Fengguan by a third party, signed a seven-year agreement during Prime Minister Stephen Harper's visit to China, even though the Canadian company has not yet secured supplies.
The deal will eventually put canola oil exported by LeMine into Chinese outlets owned by Wal-Mart Stores Inc, which sell rapeseed oil under the Fengguan brand, said LeMine Chief Executive Officer Thomas Liu.
"China (produces) rapeseed oil, and production every year is ... not enough," Liu said in a telephone interview from Toronto. "It is a popular edible oil in China already."
A Wal-Mart spokeswoman could not immediately confirm its relationship with Fengguan.
LeMine builds condos and is also involved in equity investments and legal and immigration services. Its international trade division has already exported Canadian cherries and blueberries to China.
LeMine's export deal surprised some in Canada. Industry group Canola Council of Canada welcomed it, but was not familiar with LeMine's plans. Continued...