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January 9, 2020

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LDC-Luckin Coffee JV Building New Coffee Roasting Plant
A joint venture between Louis Dreyfus Company (LDC) and Luckin Coffee is building a new coffee roasting plant in China. Image courtesy of Pixabay

A joint venture (JV) between agribusiness Louis Dreyfus Company (LDC) and coffee retailer Luckin Coffee held an event on January 6 to mark the beginning of construction on a new coffee roasting plant in Xiamen, China. LDC announced in a release that the facility will have a capacity of 30,000 tn/yr when the site becomes operational. 

“LDC is among the world’s largest merchandizers of green coffee beans, with a diverse product and regional portfolio. This is in line with Luckin’s focus on high quality coffee beans and diversified product flavors to meet consumer needs,” Jinyi Guo, Luckin Coffee senior vice president and co-founder, said in a statement. “Through this coffee roasting joint venture, Luckin extends upstream closer to the raw materials and production, giving greater product quality control and enhancing the ability to offer better products and services to consumers, together with a better coffee experience.”

Built on a 35,000 sq m parcel, the plant will feature new environmentally friendly coffee cleaning and roasting equipment. After the plant starts production in mid-2021, the JV intends to expand capacity to 40,000 tn/yr. Coffee produced in Xiamen will be sold through Luckin coffee shops located in China. 

“Our strategic partnership will continue to strengthen LDC’s business presence in China, enabling us to develop further downstream,” said LDC Chief Operating Officer Michael Gelchie in the release. “The joint venture will also enable a more robust, transparent and sustainable coffee supply chain, to provide great tasting, high quality, and convenient coffee to Chinese consumers.”

Market research firm Mordor Intelligence forecasts that the Chinese coffee market will grow at a CAGR of 10.15% from 2019 to 2024, reaching a value of $6.72 billion by the end of the period. 

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