Treasury Today Country Profiles in association with Citi

TMS vendor finds chemistry with Norwegian industrial giant

Elkem, one of Norway’s largest industrial companies and a global supplier of aluminium and silicon, is now live with the IT2 Treasury Management Solution. The platform has been installed at the company’s new standalone treasury department based in Oslo, Norway. The firm has 40 factories in Europe, North America, South America and Asia and also owns six hydroelectric power plants in Norway, the US and Canada. In 2010 it reported revenues of NOK9.3 billion ($1.57 billion).

Odd-Geir Lyngstad, Vice President and Head of Treasury, at Elkem explains that Elkem is a divestment from Norwegian conglomerate, Orkla (the RBS-advised $2 billion acquisition of Elkem by Beijing-based international chemicals and new materials company, China National Bluestar, took place in early 2011). Although Orkla had been an IT2 user, as a result of the change of ownership, Lyngstad says Elkem’s new treasury was effectively a start-up organisation. “Having operated for the past few years as a subsidiary within a centralised organisation, there is no system being superseded,” he explains. “We are therefore in the fortunate position of being able to design a best practice treasury from the ground up.”

The team has significant practical experience with alternative TMS offerings currently available to treasurers. In making the selection, paying particular attention to factors such as cost, flexibility and user friendliness, Lyngstad says Elkem went through “an exacting, disciplined process of due diligence. No names were forthcoming, but vendors under consideration included “those you’d expect a multinational treasury to consider”.

Commenting on the delivery of the system, Lyngstad says “as with any treasury there is complexity and some need for customisation to handle the business processes we need to support”. However, because the IT2 system has customisable workflows that are supplied as standard in its Process Library, it was able to meet Elkem’s needs. “In order to keep a lean and effective organisation it is important for us that all processes can be easily designed and configured to meet our exact needs as we implement a best practice corporate treasury operation.”

Elkem is now live on IT2 for cash and debt facility management, money markets, short-and long-term investments and FX across its international business operations. The system has been integrated with a number of other solutions within the business – including Reuters for market data, FXall for dealing and confirmation matching, and M3 for accounting and forecasting – and acts as a repository for all of Elkem’s treasury activities. “We started the business implementation in May 2012 and anticipate all elements of the system to be live by October 2012,” confirms Lyngstad.