The cigarette manufacturer TMCC from Achern has filed for insolvency, losing a substantial six-figure amount daily due to production issues. The company is exploring potential restructuring options, while initial steps are being taken to secure jobs and wages.
The Tobacco Manufacture and Cigarette Company (TMCC), a cigarette producer based in Achern, Baden-Württemberg, has filed for insolvency, according to a report by the “Badische Neusten Nachrichten.” The company submitted the insolvency application to the Offenburg District Court, and the initial steps of the insolvency process are now underway, focusing on evaluating whether a restructuring of the business is feasible.
TMCC, which produces cigarettes and other tobacco products, has confirmed that it plans to continue operations despite the financial difficulties. The future of the company’s over 40 employees is initially secure, with their wages guaranteed through the insolvency funds provided by the Federal Employment Agency until October, according to Matthias Braun, spokesperson for the Achern law firm Schultze & Braun, which represents the preliminary insolvency administrator, Dirk Pehl.
The reasons for TMCC’s financial troubles are manifold. A significant challenge in the tobacco industry is the high capital requirements, especially because tax stamps for cigarette packs must be pre-financed. This financial burden was exacerbated by a recent production outage caused by a defective machine, which has contributed to the company’s current situation. The firm is reportedly losing a mid-six-figure sum in revenue daily due to this disruption. Additionally, consumer demand for tobacco products has been declining, further impacting the company’s financial stability.
“This is a relatively simple business, but with a major challenge,” said Braun, explaining the complexities faced by the company. Compounding these issues, interim financing for the tobacco industry has become more difficult to secure, as banks and investors increasingly prioritize sustainability concerns in their decisions.
Currently, TMCC is in the process of seeking new investors. According to Braun, there are already “initial interested parties” considering a potential investment in the company. TMCC was founded in 2001 in Baden-Baden and moved to Achern, about 20 kilometers away, eleven years later. The company also markets its own brand, Skavenbeck.
