Saga's Ureshino City Subsidizes New Matcha Processing Plant — What It Means for the U.S. Matcha Market

Ureshino City Approves Subsidy for First-Ever Matcha Processing Plant in Saga Prefecture

Ureshino City in Saga Prefecture, Japan, has announced a significant investment in its local matcha industry. As part of its fiscal year 2025 supplementary budget, the city has approved a subsidy of approximately ¥652.74 million (about $4.3 million USD) to support the construction of a new tencha (抹茶 / matcha) processing plant — the first of its kind in Saga Prefecture. The city's own financial burden is just ¥9.64 million, with the remainder covered by broader government funding. The total project cost is approximately ¥1.06 billion.

What is tencha? Tencha (碾茶) is the shade-grown green tea leaf that is stone-ground into the fine powder known as matcha. Before tea becomes the vivid green powder used in lattes, culinary applications, and traditional tea ceremonies, it must first be processed as tencha — dried, de-stemmed, and de-veined. Until now, Saga Prefecture had no dedicated tencha processing facility, meaning local tea farmers had limited options for converting their harvest into market-ready matcha.

Key Details of the New Plant

• Location: Kaminifudo district, Ureshino Town, Ureshino City, Saga Prefecture
• Construction method: Renovation and expansion of an existing tea processing facility
• Expected completion: February 2027
• Participating farmers: 15 local tea farmers within Ureshino City
• Total project cost: Approximately ¥1.06 billion (~$7 million USD)
• City subsidy: ¥652.74 million (~$4.3 million USD)

Why This Matters for U.S. Matcha Buyers

Ureshino is one of Japan's most historically significant tea-producing regions, renowned for its kamairicha (pan-fired green tea) and tamaryokucha (curled green tea). However, the region has not previously had local infrastructure to process tencha at scale. With this new facility, Ureshino's tea farmers — 15 households in total — will now be able to produce and supply matcha directly from within the city.

Ureshino City Mayor Takuya Yamaguchi stated: "There has been no matcha factory in the prefecture until now, and this is a major opportunity to develop new sales channels." The mayor's comments point to a clear strategic intent: expanding into export and international markets, where demand for Japanese matcha continues to rise sharply.

For U.S. cafés, beverage brands, and food businesses importing Japanese matcha, this development signals a potential new source region entering the market. The global surge in matcha's popularity — driven by its use in lattes, baked goods, smoothies, and health supplements — has pushed wholesale prices higher in recent years. Expanding domestic production capacity in Japan is a direct response to that international demand.

Ureshino's Broader Agricultural Investment

The matcha plant subsidy is part of Ureshino City's record-breaking FY2026 general account budget of ¥21.34 billion — the largest in the city's history. Approximately ¥900 million of that budget is allocated to agricultural promotion projects conducted in partnership with two neighboring cities. The scale of this commitment reflects how seriously local governments in Japan's tea-producing regions are taking the opportunity presented by rising global matcha demand.

What to Watch

With the plant scheduled to be completed in February 2027, commercial matcha output from this new Ureshino facility could begin reaching export channels as early as mid-to-late 2027. U.S. buyers interested in sourcing from Saga Prefecture should begin exploring opportunities now, as demand for single-origin and regionally certified Japanese matcha continues to grow among specialty beverage and food buyers in North America.

Stay tuned to Matcha Wholesale Japan for further updates on production developments, harvest seasons, and sourcing opportunities from Japan's leading tea regions.

Source:
Nishi Nippon Shimbun (西日本新聞), February 21, 2026
https://www.nishinippon.co.jp/item/1461027/