Hong Kong

Tea manufacturer Longrun Tea Group is embarking on a major expansion program. The Hong Kong-listed company has announced that it plans to add to the number of franchise and chain stores to reach 200 by next March. It currently operates 120 such outlets.

The company also plans to invest in tea companies in Fujian, Zhejiang, Hunan and Yunnan.

Longrun intends to become to be the brand management company for over 70,000 Chinese tea enterprises.

According to the company, tea manufacturers that it acquires will keep their existing brand names and products. Longrun’s involvement will be mainly in "accelerating business development." Longrun has entered into cooperation with Rocket Capital to assist it in raising funds to the tune of HK$53 million (US$6.84 million).

"We will use HK$37 million for development of the tea-related business and split it into three components," according to Jasper Jiao, , Longrun’s chairman quoted in China Daily. "This includes establishing direct sales stores, developing marketing networks and enhancing product r&d. The balance of HK$16 million will be used to fund daily operations."