Frankfurt's media vision
'I
working relations
Knowing you are a knowledge-driven bank and actually proving it are two very
different things, especially in a market where few foreign financial institutions
actually make money. Getting into the German market, particularly the
traditionally conservative F&A sector, has been tough for our people in
Frankfurt. Now, however, the tide is turning. Strategie contacts with the
country's top trade medium, Lebensmittel Zeitung (Food Magazine), has opened
doors to top players in this ripe market. Frankfurt's Stefan Riphaus explains.
Exceptional experience
Debt and tax
Mid-cap growth
Major step
Strong start
What'sNewS Issue 12-December 1998 3
t was Manfred Schneider's idea to
invite the four senior editors of
Lebensmittel Zeitung, the most
uthoritative trade journal in Germany,
o come here for a presentation on
Rabobank,' Riphaus says immediately.
'He argued that we needed a platform
through which people in the business
AU* l
ient I
Manfred Schneider (right) presents the latest
juice study to LebensmittelZeitung's editor-in-
chiefAntje Stickel
would perceive us as a source of
Anowledge and expertise. Basicallv, we
Tiad 15 minutes to convince them that we
had much more insight into this market
than other banks.' And 15 minutes was
more than enough. Editor-in-chief Antje
Stickel and her team were so impressed
that, at our suggestion, they agreed to our
Frankfurt team co-organizing a major
conference on the future of the industry,
and they even paid for it.
'The editors had been looking for a
serious partner to co-organize something
along these lines,' Riphaus continues.
'Initially, they had thought about a
workshop on survival in a changing
market environment. Once we sat down
with them, the idea quickly grew into an
intense two-day event that drew close to
^0 people on CEO and owner level front
every segment in the chain, everything
front the huge multinationals, such as
Proctor and Gamble (P&G), to dairy,
meat, fruit, logistics, beverages and
transport companies. It has truly been an
exceptional experience for us, and one we
intend to build on.'
One of the reasons why the German
market is at the same time so difficult and
so attractive is the size of most companies.
There are no huge domestic players, most
are large mid caps. 'The reason they have
remained this size is two-fold and
interrelated,' Riphaus explains, 'bank debt
and high taxes. Most companies' primary
aim is to reduce tax burdens. The problem
with that is little profit equals little equity.
So there are limits to growth because
these companies have to live within the
limits of the bank debt available. We
wanted to show companies that by using
instruments other than credit, you can
manage growth successfully. Unfortu-
nately, however good your story may be,
if you're not getting in to see the right
people, then you've no chance of con-
vincing them of what you have to offer.'
It is this very situation which makes the
sector attractive for banks able to climb
out of the credit trap. 'A lot of credit-
focused bankers will not even look at
companies with such little equity,"
Riphaus believes. 'In our view, this means
they miss out. What these companies need
is the kind of products that have enabled
counterparts in, say, the US and UK to
grow. We had defined three options for
mid-cap growth. One is organic; a second
is international expansion; the third is
alliances and acquisitions. The first is
slow. For the second and third, you need
thoughtful financial advice. For the credit
provider, the bottle-neck is weak equity.
So, unlike US and UK mid-caps in the
same situation in the past, our companies
are not going to their investment banking
product specialists saying: we want to
expand, how can you help me? Here in
Frankfurt, we aim to be the hank, the
people who can respond to that need in a
knowledge-driven way.'
The conference proved an exceptional
platform for our Frankfurt branch to get
their message across. But it was also a
culmination of what Riphaus describes
as a major learning experience. 'Working
with the people front the Lebensmittel
Zeitung has heen a quantum leap,' he
says. 'I found I was telling a better story
to clients every week because putting the
concept of the conference together
changed the way I Iooked at the sector.
Because my story got better all the time,
I found 1 was able to refine our thinking
on strategie growth and how we can
help customers achieve it. Our new
M&A team, headed up by Rudi
Strittmatter, is a real asset in that respect.
We're able to provide concrete answers
that no longer depend exclusively on
credit. I think that's a major step in the
right direction.'
The Frankfurt team are thrilled at the
results of the conference, but so, it
seems, are the people from the
Lebensmittel Zeitung and the
participants. According to one, the CEO
Clients networking: Frank Schobert, CEO of P&G
Germany (right) exchanging views with Hans
Löblein, owner ofa German meat processor
of a large food transport company based
in Hamburg, 'the high quality of the
speakers, the practical relevance of the
content and the professionalism of the
organization was very impressive.' Many
others indicated they hoped this would
not be a one-off event. Riphaus and his
colleagues are already talking about a
second conference with the Lebensmittel
Zeitung, a meeting they hope will
continue what looks likely to become an
integral part of the German food sector.
