Hainan grows big coffee business through BRI

South China's Hainan Province started to develop the coffee industry earlier than many places in the country, having a large consumer market and strong consumption potential. As China’s southernmost province, it is a bridge to trade with Indonesia, well-known for its unique geography and climate which produces coffee with distinctive flavors.

"Thanks to the joint construction of the Belt and Road Initiative (BRI), we are making efforts to gradually expand the coffee industry," said Li Yu, chairman of Hainan State Farms Tropical Products Industry Group Co., Ltd. He is full of confidence in the industry’s prospects. “Nowadays, Javanese latte, ground coffee, etc, have become popular.”

Photo shows a coffee plantation of Hainan State Farms Tropical Products Industry Group Co., Ltd. (Photo courtesy of the interviewee)

As a major industry that Hainan endeavors to develop, the coffee industry has received strong support from governments at various levels.

To build an international coffee market, Hainan has rolled out policies to support the development of the seed industry and cross-border trade, as well as favorable tax policies. These policies combined with tourist consumption have provided a development base for the cultivation of 10 coffee varieties suited to the local environment.

Statistics indicated that in 2022, the area of farmland in Hainan on which coffee was harvested rose by 180 percent year on year, the production of coffee increased 225 percent year on year and annual processing capacity reached 9,000 tonnes.

Photo shows ripe coffee beans at a coffee plantation of Hainan State Farms Tropical Products Industry Group Co., Ltd. (People's Daily Online/Meng Fansheng)

"In recent years, Hainan has made rapid progress in the coffee industry but it is still necessary to learn planting and processing techniques from regions where coffee is a mature industry," said Li.

In February 2023, a conference to promote the Hainan Free Trade Port was held in the Indonesian capital of Jakarta. At this meeting, Hainan State Farms Tropical Products Industry Group Co., Ltd. and Indonesian coffee company Kapal Api Global signed a cooperation agreement, pursuing joint efforts in development.

"Thanks to the joint construction of the BRI, we've established partnerships with our counterparts in Singapore, Vietnam and other countries to try to achieve common development through cooperation and exchange," Li said.

On April 10, 2023, Kapal Api opened its first physical store in Haikou, capital of Hainan.

Jiang Jiawen, marketing manager of Kapal Api China, said Kapal Api hopes to open more stores across the island province, to strengthen cooperation with its Chinese counterparts and participate in the internationalization of China’s coffee industry. "The Chinese market has unlimited potential, and the BRI provides an excellent opportunity for Indonesian companies to find partners and develop international markets," an executive of Kapal Api said.

"By leveraging the enormous domestic market while connecting to the Southeast Asian market, which is the fastest-growing market in the world, Hainan enjoys a broad prospect in coffee manufacturing and trade," said He Qiongmei, director of the Department of Agriculture and Rural Affairs of Hainan Province.

“The preferential policies of the Hainan Free Trade Port provide us with a rare opportunity to cooperate with agricultural enterprises in countries and regions along the ‘Belt and Road’ in Southeast Asia, which can better connect Hainan’s coffee, pepper, and tea with the international market, and in turn become a bridge to promote and deepen cooperation on the BRI." Li Yu is full of confidence in the future.