TEEKANNE Group – a success story

, Commerzbank develops customised financing concept for core game-changing project

In 1882 – only twelve years after Commerzbank was established – the company R. Seelig & Hille was founded, laying the foundation for what would later become the TEEKANNE Group. TEEKANNE has been an important player on the German and international tea market ever since. Milestones in the company’s successful history include its inventions – such as dual-chamber tea bags, which are now used worldwide, and the tea bag packing machine. However, innovation is still alive and well at TEEKANNE, where newer inventions include cold-brewed teas and ready-brewed iced teas without added sugar.

TEEKANNE’s German market share of around 30 per cent concentrates on the herbal, fruit, black, green and roiboos tea segments, with a significantly growing share of organic products. In line with its “Responsible indulgence” motto, the company believes in combining economic success with social and ecological responsibility. That includes measures, projects and partnerships aimed at increasing sustainability and improving social standards both in Germany and in the countries from which TEEKANNE sources its raw materials.

The TEEKANNE Group has production facilities and branches in seven countries, exports its products to many other markets, and has numerous trading partners in Europe and beyond. This means that TEEKANNE products are available in more than 50 countries around the globe. A total of 1,300 employees are responsible for the entire production process that begins after harvesting and ends with creating the final blends of tea. The company’s own laboratory conducts over 20,000 analyses a year. The name TEEKANNE is a byword for the very highest quality.

Quality, efficiency and sustainability are key factors for TEEKANNE’s future viability. This awareness resulted in the Group’s largest game-changing project yet: the TEEKANNE Tea Processing Project (TTP) – true to the motto “If you want to grow, you need partners who think big too”. The project included:

• The construction of a sustainable, state-of-the-art raw materials warehouse that meets the increasing storage requirements of more than 300 different plants and enables efficient logistics
• The construction of a technologically unique fine-cutting centre to prepare and cut the tea ingredients for further processing
• New machines that optimise processes and conserve resources to enhance efficiency and sustainability
• The in-house production of organic goods as a strategic focus point

The TTP is also a clear commitment to TEEKANNE’s plant in Düsseldorf.

The company estimated investment expenditure of €60 million, to be equally distributed between equity and debt financing. But what was the best way to structure the debt financing component? TEEKANNE invited national and regional banks to submit offers that answered this question. Commerzbank’s concept was widely appreciated and won the tender thanks to the Bank’s famous “Going the extra mile” credo.

Subsidised loans were part of Commerzbank’s concept right from the beginning, which is why the Bank’s financial engineering specialists were involved in developing the offer from the outset. Their know-how helped select the right programme loans and public subsidies from the many schemes offered above all by Kreditanstalt für Wiederaufbau (KfW) and NRW.BANK. As well as resulting in lower funding costs, this allowed TEEKANNE to receive the maximum amount of public subsidies for the project, making Commerzbank the obvious choice. Risk appetite was divided between several parties, as TEEKANNE asked for a financing provider to be included as a junior partner.

TEEKANNE values Commerzbank as an advisor on all levels. As soon as it was given the green light, the Bank assisted and coordinated the entire financing process in close cooperation with TEEKANNE. Construction work began in October 2019 and the Tea Processing Project was operational four years later in 2023.

The COVID-19 pandemic, which broke out during the construction, was an unexpected challenge for the TTP financing. Following lockdowns, missing deliveries of raw materials from tea-growing countries, revenue slumps in the hospitality industry and high inflation rates in the subsequent period, it was necessary to adjust the liquidity situation and reassess the short-term need for credit. Commerzbank responded right away, increasing the working capital facilities significantly and proving its strong commitment to the partnership with TEEKANNE. As TEEKANNE’s CEO Frank Schübel put it: “A good cup of tea draws for five minutes. A solid partnership lasts for decades.”