Cargill to double canola production in Canada

The new plant will be located adjacent to Cargill's existing operation in Clavet, Saskatchewan, and is expected to double the firm's oilseed processing capacity to 1.5m tons annually.

Cargill said the added crush capacity is supported by strong demand for hi oleic canola oil in addition to growing demand for generic canola oils.

Indeed, the oil's potential to penetrate the food processing sector as an alternative to trans fat oils has boosted its popularity in recent years, prompting Canada's Canola Council earlier this year to predict the production of the crop to more than double by 2015.

Cargill's capacity expansion, which is due to be completed by November 2008, positions Canada as a world leader in the supply of 'high quality' vegetable oil, said the firm.

"Saskatchewan has over half of Western Canada's canola acres, making Clavet an ideal location for the new facility," said Ken Sauser, plant superintendent at Cargill in Clavet.

"We are entering a period of rapid global growth in oilseeds and Canadian canola will play a key role in that growth.

As our North American and world customer base continues to grow for generic and specialty canola oils, the canola producers of Western Canada become an even more critical partner to us," added Ken Stone, Cargill's Canadian Oilseed Manager.

The nation's Canola Council in April said it aims to reach production levels of 15 million tons over the next eight years, a 65 percent increase of current levels of 9.1 million tons.

The trade association has set out three major steps to help it achieve its production objectives: capitalize on rising demand for healthy foods; focus on innovation as a means to improve quality and better face competition from other oil crops; and increase yields and invest in research and development in the crop relative to its major competitor, soy. US and Canadian market demand for oils and fats is anticipated to grow by 3-4 percent per year.

And according to the Canola Council, three key factors will "disproportionately bias" demand in favor of canola in the coming years: the oil's health benefits; its potential as an alternative to trans fat oils; and the fact that an increased production of biofuels will result in excess soy meal production, which will in turn change the economics of processing canola relative to soy for use in the vegetable oil segment.

In May this year, Cargill Specialty Canola Oil announced plans to open a 150-acre specialty canola research farm in Canada which will develop high yield traits to meet expected surging demands in the future.

The research farm in Aberdeen, Saskatchewan, is located about 30 miles from the company's canola crush facility in Clavet, and aims to focus on developing the next generation of output traits.

"The research farm at Aberdeen will enable Cargill to centralize its hybrid breeding program right in the commercial production region," said Alan Willits, president of Cargill's Specialty Canola Oils business in May.