Recently when I was quoted by Bernama on a news report with regards to TRT ETGO, Montreal, Canada (FELDA's investment) a friend wanted more information, as promised I'm pleased to share some details and facts with regards to TRT ETGO, I do hope this information would provide some explanation to those few who are still confused with regards to FELDA's investment in Canada.
However, I have said numerous times, that 'you can wake-up a person who is really asleep, but, you can never wake-up a person who is pretending to sleep'.
For your information, TRT ETGO is a business that can potentially crush 1,020,000 mt per year against total crush capacity of 9,500,000 mt per year.
With such a huge crush capacity, gross margin for canola ranges from $35 to $60 per metric tonne. There were instances margins went as high as $80 - $100 pmt historically, however during that time TRT ETGO wasn't operational. These are also industry wide averages at gross level.
Crushing Capacity Share wise, TRT ETGO holds 11% of total crushing capacity in Canada. Bunge - TRT ETGO's partner holds the highest share at 28%.
Canola capacity utilization for Canada for 2010/2011 was around 70% for Canola and about 50% for soy. TRT ETGO's capacity utilization for 2011 was close to 60%.
Having explained the crushing capacity as well gross margin and capacity utilization for Canola, you may want to know what are the future business developments for TRT ETGO;
TRT ETGO under the Bunge ETGO joint venture have the following development plans;
1. More canola processing - better margin for canola should bring better returns to the JV. Greater reliability will push TRT ETGO's production rate close to 95% by early 2013.
2. Encourage local canola planting - to be self sufficient and to swing the supply split from 90% sourced from western Canada to the eastern side where Becancour is located.
3. Improve distribution channels - use Bunge's existing vast distribution channels to ship out canola oil from TRT ETGO plant.
4. Focus on operational efficiencies - improved plant efficiency and share of technical know-how from the JV improves formulation for better products and greater production reliability. TRT ETGO will run close to 95% from early 2013.
5. Market expansion - Europe's renewable energy criteria (RED) for renewable energy is synonymous with TRT ETGO's plant with its certified ISCC status and proximity to the Europe. Bunge's network in South America opens more markets for Canola oil especially for mandated renewable energy demand. New markets ensure production are absorbed by new demand.
So as far as I'm concerned FELDA, TRT ETGO & BUNGE ETGO is indeed a venture that's not only going to bring benefits to FELDA but on the whole it would put Malaysia not only as a leading palm oil exporter, but canola as well and then, we will be major player in the world of vegetable oil.
Maybe they would not be able to see profits immediately, but, give them some time and I'm sure they would be able to do well.
I sincerely hope the above explanation would provide some light for those who are still living in darkness, should you need further information please do not hesitate to ask me, I will try my best to explain.