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Starbucks Expanding in Indonesia and Philipines

By Rich Smith - Apr 4, 2013 at 6:00PM

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Building 200 new restaurants in its No. 1 most-profitable market.

Present in Southeast Asia since 1996, and doing business there (as a coffee buyer) since 1971, Starbucks (SBUX 2.03%) is ready to take its next big step in the region.

The company announced Thursday that, over the next four years, it intends to open 100 new coffee stores in the Philippines. It's moving even faster next door in Indonesia, where Starbucks plans to open 100 stores over just three years. So said company CEO Howard Schultz during a tour of the region earlier this week.

The motivation is obvious -- and it's not just about getting bigger. Starbucks currently gets about 5.4% of its annual revenues from sales in the China / Asia Pacific region (CAP) -- but it derives 12.7% of annual pre-tax profit from there.

Investors responded well to Shultz's plan to do more business in the region that's literally Starbucks' most profitable place to do business. The shares gained 0.7% in Thursday trading to close at $58.11.

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