* China company would be main owner, buy all oil
* W. Canada crushing highly competitive (Adds analyst comment)
WINNIPEG, Manitoba, Jan 28 (Reuters) - Clean Power Concepts Inc (CPOW.PK) said on Friday it has formed a joint venture with China's Chongqing Grain Group Co. Ltd (CGG) to study the feasibility of building a 600,000-tonne canola crushing plant in Western Canada.
The plant, if built, would add to an intensely competitive industry that has seen crushers Cargill Inc [CARG.UL], Richardson International, Louis Dreyfus and Bunge Ltd (BG.N) expand plants in Western Canada.
It's unclear how the crush plant would be financed and some canola industry officials said they had heard little about the companies or their plans.
Building another large crushing plant in Western Canada is questionable, considering crush margins -- a measure of profitability -- are currently poor, said Don Roberts, analyst at Canolainsight.com.
"I think there's overcapacity," he said.
A Clean Power spokesman could not be reached for comment.
Farm production of canola, which is crushed for oil for use in vegetable oil and for its meal for livestock feed, is expanding with demand and prices rising.
China is a key export market for canola oil.
Vancouver, British Columbia-based Clean Power would buy the meal produced at the plant, while CGG would buy the canola oil, Clean Power said in a press release.
CGG would be the majority owner of the plant.
(Reporting by Rod Nickel; Editing by Lisa Shumaker and Sofina Mirza-Reid)