Martin Bauer Group enters into joint venture with Chinese partner

Vestenbergsgreuth - March 2010 saw the Martin Bauer Group joining forces with Chinese tea producer ShanShan Tea to set up a new company. "This offers us a means of establishing a better foothold in the Chinese tea sector," Adolf Wedel, Managing Partner of the Martin Bauer Group explains. "With a population of 1.3 billion, the Chinese market also offers us tremendous potential. We are therefore taking the next logical step towards further consolidating our contact with the Asian market and, by doing so, will be producing in China directly for the Asian region and for other parts of the world."

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Founded in Vestenbergsgreuth in 1930, the Martin Bauer Group manufactures high-quality products associated with tea, extracts and botanicals for national and international customers in the tea, beverage and pharmaceutical industries. The Chinese partner in the joint venture, Zhejiang ShanShan Tea Co. Ltd, with its headquarters in Hangzhou (190 kilometres to the south of Shanghai), has been producing loose and packed tea, decaffeinated tea and tea extracts for the beverage industry since 2004. "With the tradition-steeped Martin Bauer Group and the relatively young ShanShan Tea company, two very different companies are pooling their resources in this venture," says Adolf Wedel. "But this very disparity is the generating force for considerable synergetic effects." The new joint venture will be primarily producing decaffeinated tea and tea extracts for the Asian and American markets at its new facility, which is to be built in Hangzhou. "The facility's proximity to the raw material and the proximity to the Asian market are the major advantages of this strategic undertaking. It will also offer us a means of substantially reducing transport costs and enable us to survive in these highly competitive markets," Albert Ferstl, Managing Director of the Martin Bauer Group explains. "China is a green tea country by tradition and the new company will therefore specialize in the extraction and decaffeination of green tea to start with. However, we are also hoping to enjoy success with our fruit and herbal products in the Chinese market in the long term."

Cooperation based on trust

The Plantextrakt Business Unit of the Martin Bauer Group and ShanShan Tea have already been cooperating in a working relationship based on trust for some years now. "We had completely exhausted our decaffeination capacity in Vestenbergsgreuth in 2004," says Albert Ferstl. "We were looking for a flexible solution that would enable us to serve our customers and we decided in favour of a delivery agreement with ShanShan Tea." The two companies have also been cooperating in the extraction of green tea since 2006. "As far as we are concerned, the joint venture agreement is the next logical step in this process," Adolf Wedel explains. "And we are very pleased about it because we have found a reliable partner in ShanShan Tea, who knows all of the ins and out of the Chinese market."

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