McDonald's to Establish Food Production Complex in China with 280 Billion Won Joint Investment

McDonald's China subsidiary is establishing a large-scale production complex through joint investments with food companies. The company cited the importance of the Chinese market in terms of the food supply chain as the background for this development.

According to China's state-run Global Times (GT) on the 3rd, McDonald's China announced that it will create the Hubei Smart Food Production Complex through joint investments with partners including hamburger manufacturer Bimbo QSR, the largest U.S. meat processing company Tyson Foods, XH, and Zidan. The joint investment is estimated at 1.5 billion yuan (approximately 284.2 billion KRW).

[Image source=Yonhap News]

The complex is expected to produce 34,000 tons of meat products, 270 million pieces of bread, 30 million pastries, and 2 billion packaged products annually. It will also feature a 25,000㎡ advanced automated warehouse for frozen, refrigerated, and dried foods. The company expects that once the complex is established, logistics time from manufacturing to each store can be reduced by 90%.

Additionally, by leveraging the complex's regional and geographical advantages, it will serve as a supply hub for central and western China, enhancing efficiency and stability.

Phyllis Cheng, CEO of McDonald's China, explained, "McDonald's has been deeply rooted in China for over 30 years, and this industrial complex reflects our long-term development in China."

Recently, McDonald's has been expanding its business in China. As of the end of June, there are over 6,000 McDonald's stores in the Chinese market, employing 200,000 staff members. McDonald's has announced plans to operate 10,000 stores by 2028. To ensure sustainable growth, McDonald's and its suppliers have invested more than 12 billion yuan from 2018 to 2023 to increase production facilities and strengthen supply chain stability.

According to China's Ministry of Commerce, foreign direct investment in China from January to May this year was about 412.51 billion yuan, a 28.2% decrease compared to the previous year. However, the number of newly established foreign enterprises increased by 17.4% year-on-year to 21,764.