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Starbucks believes in China and announces state-of-the-art facilty in Kunshan

Starbucks Kevin Johnson
Starbucks President and Chief executive officer Kevin Johnson

MILAN – In a sign of hope for the future, Starbucks Coffee Company has announced an investment of approximately $130 million in China to open a state-of-the-art roasting facility in 2022 as part of its new Coffee Innovation Park (CIP).

The new CIP, wholly-owned and operated by Starbucks, will source coffees from China and around the world directly from origin for processing, roasting, packaging and distribution, for the first time in China. Construction of the CIP will begin later this year in the city of Kunshan, an hour from Shanghai.

As Starbucks largest manufacturing investment outside of the U.S. and its first in Asia, the CIP will create highly-skilled jobs and new career opportunities that will further drive smart and sustainable coffee manufacturing in China.

The plant will serve as a key component of the Company’s global roasting network, and the bold infrastructure investment further deepens Starbucks multi-decade commitment to strengthen the specialty coffee industry in China, where it aims to have 6,000 stores by 2022.

Building on Starbucks sustainability announcement in January, the CIP will incorporate advancements in sustainable manufacturing, smart supply chain innovation, and technology to support the aspiration to deliver the most energy- and water-efficient roasting operations for Starbucks in the world, while minimizing waste.

The new roasting plant facility will be designed with the intent to apply for U.S. Green Building Council LEED Platinum certification, as well as China’s Three Star Green Building standards.

“We recently announced a bold multi-decade aspiration to become a planet positive company. A company that gives more than we take from the planet. China is one of our most important markets and The Coffee Innovation Park is an important, strategic investment that has a positive impact on our carbon footprint and supports our long term sustainability goals,” said Kevin Johnson, president and chief executive officer, Starbucks.

“Starbucks has spent the past 20 years sharing its passion for coffee across China and helping to build a leading industry that makes us all proud. The roasting facilities at the Coffee Innovation Park will set a blueprint for the future of coffee roasting and supply chain management, and further elevate China’s coffee industry, while supporting Starbucks growth in China, with China,” said Belinda Wong, chairman and chief executive officer, Starbucks China.

“Starbucks has always taken a long-term view in China, and our commitment to the market has never been stronger.”

The virus outbreak brought most of Starbucks’ Chinese operations to a halt earlier this year with about 80% of its 4,300 stores closing in early February.

Now, almost all of those are up and running with elevated safety measures in place, according to the company. Starbucks has made China – as well as the U.S. – central to its growth plans, reports Bloomberg.

On March 9, Jing Daily reported that China may soon have the disease under control thanks to its proactive public health measures. According to analysts quoted by Reuters, government-imposed quarantine measures may begin to lift as early as the end of March.

On Thursday, Kevin Johnson said he is prepared to take similar measures in the U.S. – closing cafes and limiting seating – to contain the virus spread.

The world’s biggest coffee-shop company last week also reassured investors that the virus impact would be temporary, but said second-quarter profit would take a hit by as much as 18 cents a share.

“As the undisputed leader in specialty coffee, Starbucks is renowned for its tremendous contributions in developing China’s specialty coffee industry over the past two decades,” said Mr. Wu Xinming, Party Secretary of Kunshan.

“We are delighted to welcome Starbucks reputed coffee expertise to help build a best-in-class coffee supply chain in Kunshan, which offers an ideal environment for Starbucks to invest and elevate its coffee leadership in China.”