LSG Sky Chefs Boosts China Expansion

Strengthening of existing Partnerships with new locations in Kunming and Lanzhou Gateway Cities


Hong Kong – LSG Sky Chefs, the world’s largest  irline caterer and in-flight solutions provider, is surging ahead with brisk expansion plans in China, the world’s fastest growing airline passenger market. Two separate new joint-venture agreements have allowed the global service provider access to rapidly developing markets.

Further to its existing nine operations in China, LSG Sky Chefs has ventured into the southwest province of Yunnan, in collaboration with Eastern Air Catering Investment and Kunming Air Traffic Control Bureau. The 20-year agreement will result in the establishment of Yunnan Eastern Air Catering Co Ltd, a new joint-venture company.

The company will operate in Yunnan’s capital Kunming Waujiba International Airport and newly-opened subsidiary airports in the tourist destinations of Lijiang, a world heritage site, and Zhongdian, also known as Shangrila, one of China’s major tourist attractions and gateway to Tibet. The new joint venture company is also planning to build a flight kitchen at the planned new Kunming airport with an initial design of about 12,000 square meters and a production capacity of 25,000 meals per day.

“We are very happy to extend our longtime partnership with Eastern Air Catering Investment, with whom we also work in Shanghai and Xian,” said HK Cheung, LSG Sky Chefs Chief Operating Officer Asia/Pacific region. “Yunnan Province has a very promising future and it is currently the site of massive investments and infrastructure improvements. New highways and rail-links, for example, will link Kunming with Thailand, Vietnam, Singapore, and other estinations througho ut Southeast Asia, bringing great opportunity for growth.”

Separately, LSG Sky Chefs has signed a 30-year joint-venture agreement, named Gansu HNA LSG Sky Chefs Co Ltd, with HNA Air Catering Holding Co. This is the third joint venture between LSG Sky Chefs and HNA Air Catering Holding Co Ltd, following successful cooperation in Sanya and Urumqi.

This new joint-venture will establish a new catering facility at Lanzhou Zhongchuan Airport, located in Gansu province, the second largest city in
northwestern China, on the Mongolian border. The partnership will also see LSG Sky Chefs manage a small existing catering unit at Dunhuang Airport, also in China’s northwest.
LSG Sky Chefs continues to develop new areas of cooperation and strategic expansion in China and around the globe.

Background facts about the developments in the respective areas

Kunming, Yunnan province (Western China):
Yunnan province, of which Kunming is the capital, has about 43 million inhabitants. The province is fast developing as a financial and commercial centre, following the free-trade agreement between China and ASEAN (Association of Southeast Asian Nations), the world’s largest, due to go into effect in 2010. The current Kunming airport had 14.5 passengers in 2006 and is growing at a rate of about 20 percent per year. A new airport is under plan to cope with the increasing demand.

Lanzhou, Gansu province (Northwestern China):
Lanzhou Zhongchuan Airport currently serves approx. 2.6 million passengers (outbound) per year with operations to 35 national destinations. The new catering facility in Lanzhou, due to open late in 2008, will have an initial size of 2,000 square metres and a production capacity of up to 6,000 meals per day.

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