The first stage of a grain oil production hub by the China National Cereals, Oils & Foodstuffs Corporation (COFCO) went on stream in Tianjin recently.

The 2.6 billion yuan investment project has been pinpointed to be the largest cooking oil processing base in North China. The hub is expected to meet the consumable oil demands of 200 million people by the year 2015. It will be one of the largest grain cooking oil processing bases in China once completed.

It is estimated that by 2015, the 4.6-square-kilometer industrial park in Tianjin Binhai New Area will produce a yearly output of pressed oil and essential oil that will reach 10 million tons and 4 million tons respectively, while over 10,000 tons of cooking oil will be produced each day.

The project is another critical move made by COFCO in strengthening the company's presence in different regions across China as well as the entire industry chain.

The expansion of the business will enhance the capability of processing agricultural products in North China, and will make it the main supplier of cooking oil for Beijing, Tianjin, and their surrounding areas, making it a major player in ensuring the safety of cooking oil.

The project will allow COFCO to set a new annual-processing record of 10 million tons of cooking oil, according to Frank Ning, Chairman of COFCO. The launch of the project in Tianjin will also allow COFCO to better serve the national policy of providing sufficient cooking oil for citizens.

Covering an area of 300,000 square meters in the Tianjin Harbor Economic Area, the eatable oil production project of COFCO is developed in conformity with the standards for grain cooking oil industrial parks.

Zeng Liying, deputy director of the State Administration of Grain, said that Tianjin Binhai New Area and COFCO have worked closely together to establish the grain and cooking oil processing base.

The project involves a total investment of nearly 4 billion yuan. For the first- and second- phase construction, 2.6 billion yuan will have been invested in 100,000-ton-level docks, 100,000-ton oil tanks, silos with the capacity to hold 120,000 tons in materials, plants which can press 4000 tons of oil every day, and other accessories. The first phase of the project will process 1.32 million tons of grains and produce 1.02 million tons of meal as well as 240,000 tons of virgin raw oil annually.

The second phase of the project is under construction and is expected to come into operation in October this year. It will include a production line that can handle 3400 tons of oil each day and oil tanks with a volume of 48,000 tons.

In recent years, rising incomes and living standards have stimulated food, beverage and industrial product consumption, driving people to purchase more oil and food. In 2010, up to 29.87 million tons of oil and 60.92 million tons of food were consumed in China, with year-on-year increases of 9.9% and 14.3% respectively. Judging from the long term development tendency, China's oil and food consumption will maintain steady growth for years to come.

By 2015, the Tianjin Harbor Economic Area is expected to become the largest grain cooking oil processing base in North China with businesses including grain cooking oil, food, biotechnology, trade and R&D with explicit distribution, effective allocation of resources, concentrated projects, and convenient transportation.

The base will become a cooking oil processing industries cluster with the gross value of a yearly industrial output reaching 100 billion yuan, with COFCO, Beijing Grain Group, and Sinar Mas Group taking the lead.