Xie Xiang never heard of Idaho and probably will never think about it again. But as she sits at a Beijing McDonald's munching chicken nuggets and fries, J.R. Simplot is smiling back home in Boise.
Xiang has just dished out 17 yuan, or about $2, for a McDonald's meal - half a day's salary for a typical worker in China. Even so, plenty of young kids drag their parents and grandparents to Ronald McDonald land and come out with Happy Meals.Young couples meet for dates and workers drop in on their lunch hour. "I like the environment there," Xiang said. "Everybody wears the same costumes and everything is very clean."
Chances are, the fries she savors are made from spuds exported from Idaho or grown in Chinese fields from Idaho seed potatoes. Behind every McDonald's french fry in Asia is Boise's J.R. Simplot Co., whose Beijing joint venture has an exclusive agreement to supply the frozen french fries for McDonald's in China and Hong Kong.
Simplot also supplies most of the fries for McDonald's restaurants in Japan, Singapore, Indonesia, Thailand and Australia. The company also supplies potatoes and sweet corn to more than 100 Kentucky Fried Chicken restaurants in China.
Positioning itself to grow in China - the world's biggest consumer market with a population four times that of the United States - is a historic move for Simplot. The future success of this Boise-based company, which employs 5,400 people in Idaho, is tied to the growing popularity of McDonald's in Asia.
As McDonald's plans to open another 300 restaurants in China in the next three years, Simplot will be right behind, supplying thousands of tons of frozen fries.
"China represents for Simplot a culture and country that really is very much on the other side of the world from what our tradition has been," said Jim Hungelmann, senior vice president of international operations for Simplot Food Group in Boise.
"It shows Simplot's ability to get out and make significant changes and transform ourselves to be globally competitive."
That's particularly important at a time when Simplot has announced plans to cut its U.S. work force by 1,000 this year as competition among potato processors stiffens.
The company employs about 10,000 worldwide. Looking East opens new doors. "Just consider the population base," said Xiaodong Wang, general manager for Beijing Simplot.
"You've got 15 million people total in Beijing alone. Sixty miles away is another city of 13 million. Go 150 miles south and there is another city of 16 million people who don't have a single McDonald's yet."
Simplot's Beijing potato processing plant is 15 miles from the heart of the city. It takes about 45 minutes along narrow and bumpy dirt roads to reach the facility.
The plant has the capacity to process 10,000 tons of potatoes a year. That's only about 5 percent to 10 percent of the size of a typical Simplot processing plant in the United States, but the plant is significant to China in other ways.
It represents one of the first agricultural joint ventures with a U.S. company and it's also the first frozen potato processing plant to open in China.
Up to 200 full-time and seasonal Chinese workers will convert truckloads of raw potatoes into packaged frozen fries and hash browns. Line workers are paid 5 yuan an hour, about 62 cents. Their daily wage of $5 dollars is about 25 percent higher than the average wage in China.
About half the fries Simplot sells to McDonald's are imported from the United States. The rest are processed locally at this Beijing plant.
The packages are shipped to the 135 McDonald's restaurants on mainland China so they can be deep-fried and served piping hot to customers such as Xiang.
Xiang says many older people such as her parents think McDonald's is too expensive, especially compared to cheaper food stalls and restaurants selling Chinese dumplings and steamed buns. But McDonald's is gaining popularity as disposable income in China rises. "We've been very well received in China," said Ann Connolly, a McDonald's corporate spokeswoman in Oak Brook, Ill. "People like the service, cleanliness and family atmosphere."
The 129 McDonald's restaurants in Hong Kong are among the most successful in the world.
Nine years ago, Simplot started talking with farmers in Northern China. China was already the largest potato-producing country in the world. They are used primarily to make noodles.
Farming practices were primitive.
Simplot sent agricultural specialists to Northern Hebei Province. They brought plants from Idaho russet burbanks and other varieties. Farmers propagated the plants through several generations to produce healthy potato seeds.
The success of Simplot's China seed development venture also capped years of potato-growing efforts in Asia. Simplot had tested potato seeds in Thailand, South Korea and the Philippines before finding compatible climate and soil in China.