Treasury Insights talks to Vasu Reddy, Treasury Leader, GE Africa, about keeping in touch with people and technology, and keeping a healthy mind and body.
Tell us about your role at GE.
My role gives me some of the most challenging regulatory and commercial environments to manage, currently spanning 25 countries. My core responsibilities include cash management and funding, bank relationships and FX management. With 21 of the 25 countries subject to exchange control regulations, advising the businesses on hedging strategy, repatriation opportunities and optimal investments is a vital element of my day-to-day work. Funding plays a major part here too, so I might advise group treasury, for example, on the suitability of capital injections and how best to optimise working capital for the businesses.
How did you arrive at your current position?
I joined GE from Chevron, where I was Senior Financial Manager – Treasury, covering South and Central Africa. Prior to that, I spent a year in banking, and six years in various finance functions at the South African multinational retailer, Woolworths. I started my career with a Bachelor of Commerce (Accounting) and Honours degree in Financial Management. I later earned a Postgraduate Diploma in Accounting and completed the Leadership Executive Programme from the Graduate School of Business, Cape Town. I’m also a member of the Association of Corporate Treasurers, South Africa. I always felt that treasury presented a more exciting opportunity for me than accounts, being both forward and outward looking.
What is your view on professional training?
Treasury training can give you a solid grounding in the concepts but in this region, experience is more important. It’s essential to know what the banks can do for treasuries so therefore it is important to keep them close. Anyone can learn what a hedge is; knowing what can and can’t be done to mitigate currency risk in Angola, for example, comes from close involvement with key players. Being immersed in the region means I can take a hands-on approach, seizing every opportunity to keep learning. Having worked in retail, oil and gas, banking, and now a diversified industrial setting, I can see that whilst the treasury principles are the same in most organisations, the way the different sectors operate generates nuances for each; understanding these is essential if I am to add value. This comes from experience.
What are your main challenges?
Africa is still considered an emerging market, so currency volatility is strong. Many of the local banks suffer from poor credit ratings, so they are difficult to work with from a risk perspective. Also, the local banking environment faces an under-developed technology infrastructure, so manual processes are rife and service levels can be quite poor. The markets are highly commodity-dependent too so there is a limited banking product set, and any market downturn immediately puts pressure on foreign currency flows and liquidity. There is often little or no FX liquidity in the market; the central banks then take control which usually means allocations are minimal. This means ‘ears to the ground’ to ensure all opportunities are known and decisions are made in good time.
To what extent do you rely on technology?
It is a driving force of treasury in all GE operations. We centralise as much as possible and technology takes away most of the manual interventions and the risks this creates. It’s very important in terms of simplification, cost-containment and the creation of an efficient and structured organisation. I believe technology has enabled GE’s African operations to be included in the global roll-out of our standard processing models.
Any advice for new treasurers?
Establish a strong accounting and finance background. Spend time in a relevant banking role and, if you can get the proper exposure, then I suggest also spending time in different industries. But remember that a healthy life and work balance is essential to stay focused and calm so nothing falls through the gaps.