Nestle SA - the world's largest food company by revenue - has announced plans to increase its investment in Pu'er, Yunnan province, in a bid to increase its cultivation of oriental coffee.

A memorandum of understanding signed by Nestle and the Pu'er government, which includes building a Nestle Coffee Farming Institute, a warehousing and testing laboratory and a Nescafe Consumer Experience Center, aims to provide training and infrastructure for local farmers and promote the region's coffee production.

"Nestle has been engaged in Yunnan since 1988," said Heiko Schipper, managing director of Nestle's food and beverage division, on Tuesday.

"As a multinational company that has a long-term commitment to the Pu'er coffee industry, Nestle relishes the kind of opportunity that Pu'er offers to create shared value - helping a local economy develop while providing Nestle with a fantastic product."

Lu Han, director of the Pu'er Coffee Industry Federation, believes the MOU is an important step toward boosting Nestle's global sourcing due to the high quality and quantity of Pu'er coffee beans.

In 2010, Starbucks Corp also signed a similar MOU with the Pu'er government to promote coffee growing in the region.

Coffee has become one of the pillar industries of Pu'er city. Peng Yuanguo, the city's vice-mayor, said Pu'er produces most of China's coffee beans. It produced 36,500 tons of coffee beans in 2012, and plans to produce 100,000 tons by 2016.

He said 80 to 90 percent of Pu'er coffee beans are exported.