The city of Pu'er, known for its eponymous tea, has signed a memorandum of understanding with Starbucks that is aimed at boosting China's coffee industry and the mainland presence of the world's largest coffee chain.
The agreement, which was signed Thursday by both parties plus the Yunnan Academy of Agricultural Science, outlines plans for Starbucks' first-ever base farm, a coffee development center, coffee farmer support center and coffee processing facilities in the southern Yunnan city.
It was announced at a Kunming press conference attended by Starbucks CEO Howard Schultz and local officials on Thursday.
"Starbucks is proud to collaborate with the Yunnan government to share our coffee knowledge to help Yunnan continue to develop into a top-quality coffee growing region," Schultz said, adding that the company intended to market Yunnan coffee at retail outlets around the world.
Starbucks first began marketing its Yunnan coffee-based South of the Clouds blend in China in 2009.
For Starbucks, the agreement completes its supply chain in a country where it intends to grow its number of stores from around 800 to 1,000, according to a Yunnan Information Net report, which said the company would enter the retail market in Kunming in the coming year.
The Yunnan provincial government will invest three billion yuan (US$450 million) to expand its green bean output from the current 38,000 tons to 200,000 tons over the coming decade.
Starbucks, whose purchases of Yunnan coffee have increased twentyfold in the last three years, did not reveal how much it was planning to invest in its Yunnan operations.
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