McDonald’s China and its four major suppliers signed contracts with the local government and announced to build an intelligent industrial park in Hubei Province, China, with an investment of 1.5 billion RMB (US$229.8 million) to strengthen the brand’s supply chain.
This is McDonald’s China’s third investment plan announced in one month. Previously, we have mentioned that McDonald’s China first IT strategic R&D center opened in Nanjing and McDonald’s accelerates expansion in the Chinese coffee market, with a total investment of more than 2.7 billion RMB (US$413.6 million).
McDonald’s Supply Chain Intelligent Industrial Park is expected to be operational in 2023, with a planned area of over 300,000 square meters. The industrial park will provide food production, environmentally friendly packaging, and cold chain logistics services, with an estimated annual output value of nearly 1.5 billion RMB (US$229.8 million). The annual production capacity of the industrial park is planned to reach 34,000 tons of meat products, 270 million pieces of bread, 30 million cakes, and 2 million packaging products.
The four major suppliers of McDonald’s are Tyson, Bimbo, Xinxiahui, and Zidan. Tyson is one of the world’s leading chicken, beef, and pork producers and suppliers, and is a strategic partner of McDonald’s. Bimbo is an international leader in the bakery industry and a world-leading bakery manufacturer. Xinxiahui is a joint venture established by SF Holdings and Havi Corporation of the US. It has more than 40 years of experience in cold chain logistics. Zidan is a domestic A-share listed company that is specialized in food paper packaging printing.
The investment of the industrial park will further improve the supply speed and efficiency of McDonald’s restaurants in the midwest area of China. McDonald’s is looking to operate 1,000 restaurants in midwest China by 2023, said Chief Executive Zhang Jiayin. The brand has currently 600 outlets in the region, including Chongqing, Chengdu, and Wuhan.
The establishment of Hubei Intelligent Industrial Park is the first move of McDonald’s China’s “Five Year Plan” to accelerate its development. The company plans to have more than 4,500 restaurants in mainland China by 2022.