RCMW Group Inc (fka RCMW)

[skyhi]

Steve5 that answers the question of why CGG decided to offer a 10 year sales agreement valued at $400 million for canola oil to a Canadian supplier. Canadian canola is highly resilient crop and considered a reliable supplier around the world.

Since this company first came to my attention, I’ve been asking myself why would CGG select to offer this major sales deal to CPOW? Surely there are other Canadian company’s that are much better entrenched to supply China growing canola oil needs.

I believe ownership is the reason. CGG a state own $1 Billion dollar company understands how import Canadian’s canola oil supply is to their country’s economic future. Therefore, it’s only reasonable that CGG would decide to be an owner of a commercial canola oilseed crushing refinery in Canada. That’s where CPOW a small creditable enervative up coming company, but financial burned comes into the picture. .

In the Letter of Intent articles it states “This agreement will help Chongqing in its goal of establishing supply chains for canola which diversify its reliance on major supplies such as ADM, Cargill and Bunge and is part of a long term plan to create a food processing zone in the Chong Qing region of China which has a processing capacity of 30,000 metric tonnes ('MT') of rapeseed and 30,000 MT of grain and oil.”

CGG had in fact already began their long term plans as reported in China business news dated March 20, 2009.

Chongqing Grain Group Co Ltd, a Chinese food conglomerate, on Wednesday began construction of a food processing zone in Tongnan Industrial Park in Chongqing Municipality, Southwest China.
The food processing zone will cover an area of 600 Mu and will cost RMB 500 million.

The zone will have a processing production capacity of 30,000 tons of rapeseed oil and a storage capacity of 30,000 tons of grain and oil. The project will also include a price warehouse for grain and oil products.

When complete, the project will provide 200 new jobs and realize output value of RMB 200 million per year.

http://www.hktdc.com/info/mi/a/cbn/en/1X04AQFF/1/China-Business-News/Chongqing-Grain-Group-Starts-Building-Food-Processing-Zone.htm#

With this back ground information it is only logical that CGG would make this Joint Venture offer to CPOW and not to one of the major Canadian suppliers. Furthermore, it would not surprise me if a buyout offer has already been discussed or will be in the future.

Have you ever hear the statement “in the right place at the right time”? Well that’s the whole story behind CPOW’s potential success. IMO