Starbucks And Ai Ni Group Join Government Officials In Kunming To Sign Joint-venture Agreement To Bring China's Yunnan Coffee To The World. (Photo: Business Wire)

As part of its ongoing efforts to help elevate the coffee industry in China’s Yunnan Province, Starbucks Coffee Company (NASDAQ: SBUX) announced that it has signed an agreement to form a joint-venture company with Ai Ni Group, one of the province’s most established coffee operators and agricultural companies in Yunnan. The joint-venture company, which will be controlled by Starbucks, will purchase and export high-quality arabica Yunnan coffee beans, as well as operate dry mills in the province.
Starbucks and Ai Ni Group join government officials in Kunming to sign joint-venture agreement to br ...

Starbucks and Ai Ni Group join government officials in Kunming to sign joint-venture agreement to bring China's Yunnan coffee to the world. (Photo: Business Wire)

John Culver, president, Starbucks China and Asia Pacific, and Liu Minghui, Founder and Chairman, Ai Ni Group, each representing their respective companies, attended the signing ceremony today in Kunming, Yunnan’s provincial capital. Vice Governor Gu Zhaoxi, Yunnan Provincial Government, witnessed the ceremony.

“With its uniquely suitable climatic and soil conditions, Yunnan is one of the best regions in the world to grow coffee. With Starbucks leading coffee expertise, local market knowledge of our own Chinese enterprises, like Ai Ni Group, and the significant investments made by the provincial government, the full potential of Yunnan’s coffee industry will be gradually realized,” said Vice Governor Gu Zhaoxi.

“The formation of our joint-venture company with Ai Ni Group marks another significant milestone in Starbucks continued efforts to help develop Yunnan’s coffee industry,” said John Culver, president, Starbucks China and Asia Pacific. “The Starbucks China growth story is also about giving back to the local community. Through the Starbucks Yunnan Coffee Project and together with our partner Ai Ni Group, we are committed to help local farmers elevate the quality of the coffee in the region while bringing the best of Yunnan coffee to the rest of China and the world.”

With the establishment of the joint venture, Starbucks aims to increase its coffee-sourcing activities in the Yunnan region for use in the company’s global blends, and build long term relationships with Yunnan’s coffee farmers. The joint-venture company will also adopt ‘best practice’ processing methods to ensure a consistent and reliable source of quality coffee for Starbucks.

“Ai Ni Group is excited to partner with Starbucks to bring global best practices to the local coffee industry, and introduce Yunnan’s coffee to coffee lovers in China and beyond. With Starbucks coffee knowledge and expertise, and our well established presence in Yunnan, we are confident the new joint-venture company will be a resounding success in helping to build Yunnan up as a globally recognized premier coffee growing region,” said Liu Minghui, Founder and Chairman, Ai Ni Group.

Beyond the joint venture, the Starbucks Farmer Support Center in Pu’er City, which will provide agronomy consultation services and support to Yunnan’s coffee growers, is expected to be operational this year. In addition, the importation and local adaption tests for coffee seed varietals, conducted in collaboration with the Tropical and Subtropical Cash Crops Research Institute of the Yunnan Academy of Agricultural Science (YAAS), are progressing on track and within expectations. Through these various initiatives, Starbucks aims to develop a complete value-chain in China – from coffee seed to the authentic Starbucks Experience in stores.

Starbucks collaboration with Yunnan province coffee farmers and suppliers reached a major milestone with the launch of Starbucks ® South of the Clouds Blend® in early 2009. With support from the provincial government, Starbucks worked closely with coffee farmers and suppliers in the Yunnan region to create Starbucks first coffee blend that featured high-quality arabica coffee beans from the region. Starbucks ® South of the Clouds Blend® is now sold across numerous Starbucks locations across Asia and the United States.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

About Ai Ni Group

The Ai Ni Group, established in 1993, currently operates numerous coffee processing facilities and two coffee farms with a total area of almost 500 hectares. In addition to its own harvests, in 2009-10, the Group purchased and processed 6,900 tons of coffee parchment, benefiting almost 4,600 coffee farmer households in Yunnan Province. The Group also operates four high-end restaurants in Yunnan Province and manages a cattle business of about 10,000 heads of beef cattle. More for information about the Group’s expansive business operations in China’s Yunnan Province, please visit http://www.ynaini.cn/.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50157898&lang=en

Copyright Business Wire 2010

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