Cootamundra Oilseeds will face this competition head on, forging ahead with expansion plans which have been on hold for a number of years due to poor local harvests.

The Wagga plant, Riverina Oils and Bio Energy, is backed by a consortium of Indian investors, and will have a crushing capacity of 170,000 tonnes.

Mr Black said there is not 170,000 tonnes of canola grown in and around Wagga and thus the company will look to peak canola growing areas in the Cootamundra, Wallendbeen, Bethungra areas for seed - areas where farmers typically sell their seed to Cootamundra Oilseeds.

This increased competition is likely to prove positive for farmers, with the cashed up Indian consortium likely to offer farmers strong prices for their harvest.

Mr Black said one of the major issues to face the company will be the abundance of canola meal created out of the Wagga plant and sold throughout the region.

When canola seeds are crushed, roughly one third of the product becomes canola oil, the rest canola meal, which is commonly used in stockfeed.

Mr Black said Cootamundra Oilseeds already has some difficulty moving canola meal and with an extra 100,000 tonnes being created only an hour from Cootamundra it may prove even more difficult to sell the byproduct, and the prices achieved will almost certainly deflate.

The decreasing number of dairy cattle in Australia as Chinese milk imports increase has greatly affected the canola meal market as the dairy industry was a large purchaser of the byproduct, according to Mr Black.

With a crushing capacity 155,000 tonnes more than Cootamundra Oilseeds, Mr Black said Cootamundra Oilseeds will look to capitalise on its point of difference rather than try to compete outright with the Wagga plant.

As the largest cold pressed crushing plant in Australia, where no chemicals are used and non-gm canola only crushed, Mr Black said Cootamundra Oilseeds has a market which is very different to that of the Wagga plant.