Introduction:Once China’s largest supplier of instant coffee raw materials, Hougu Coffee is now facing collapse after its restructuring plan was opposed by financial creditors. This article provides an in-depth analysis of how this company — which managed 200,000 mu of coffee plantations and achieved annual sales of 5.6 billion yuan — fell from its peak, uncovering the causes behind its 11.5 billion yuan debt, key points in the restructuring vote, and the judicial details of Chairman Xiong Xiangren’s bribery case, offering readers with an interest in Yunnan’s coffee industry a comprehensive reference.
Hougu Coffee, once the flagship enterprise of Yunnan’s coffee industry, stands at a crossroads of destiny. This leading company, which managed over 200,000 mu of coffee cultivation bases and supported 300,000 farming households, may be heading toward bankruptcy after its draft restructuring plan failed to pass. Notably, the opposition votes from the financial institutions group and the secured creditors group directly led to the stalling of the restructuring process for this giant that produced 33,000 tons of instant coffee base powder annually.
Hougu Coffee’s operational model follows a classic “company + farmers” system:Farmers focus on planting and harvesting, while the company takes responsibility for the entire chain from green bean processing to deep processing. In Yunnan’s production areas, this model is similar to those of brands like Lingfeng and Starbucks, but Hougu once stood out with its 200,000 mu plantation scale. Its instant coffee raw materials were long supplied to international brands such as Nestlé and Maxwell, with a market share that once exceeded 60%, and revenue reached as high as 5.691 billion yuan in 2017.
The rise and fall of this company are closely tied to fluctuations in the coffee market. Between 2010 and 2012, a rust disease outbreak in Brazil led to a global coffee bean shortage, and Yunnan’s production area saw a rare high price of 40 yuan per kilogram. Although prices later fell back to the range of 13–17 yuan, Hougu had already expanded aggressively during the high-price period, laying the groundwork for financial risks. Starting in 2018, capital chain issues gradually emerged, and in 2019 multiple banks filed lawsuits. Eventually, in April 2023, a restructuring procedure involvingtotal liabilities of 11.5 billion yuanwas initiated, with as many as 637 creditor representatives.
The personal fate of Hougu Coffee’s chairman, Xiong Xiangren, adds even more drama. Court documents published on the China Judgments Online show that between 2012 and 2018, in order to resolve the company’s poor credit and high debt issues, Xiong Xiangren obtained bank loans through bribery, involving a total amount of 51.7292 million yuan. Among this, he gave 21.3792 million yuan (including 18.4 million yuan in solicited bribes) to Dai Shihong, the former head of the Yunnan branch of the Export-Import Bank of China, and his associates, and also bribed Zhou Dong, the former deputy head of the Yunnan branch of the Bank of Communications. Ultimately, the court sentenced Hougu Coffee for the crime of corporate bribery with a fine of 5 million yuan, while Xiong Xiangren himself received a two-year prison sentence and a fine of 500,000 yuan.
Looking back at the history of Yunnan’s coffee industry, this story has a subtle connection to the first batch of coffee trees introduced by French missionary Térrante in the late 19th century.Hougu’s office still displays a century-old coffee tree root carving—a frost-surviving plant preserved by Xiong Xiangren, witnessing a century of development in the production area. Now, Hougu’s fate will depend on the outcome of the next vote. Its restructuring path not only concerns the survival of one company but also serves as a crucial industrial warning for Yunnan’s more than 200,000 coffee growers.
The above content is compiled by CoffeeHunters, a coffee news website.
