Treasury Today Country Profiles in association with Citi

Jose Cuervo

Best Cash Management Solution Highly Commended: Casa Cuervo

Fabio Monico, Bank of America Merrill Lynch and Maria Isabel Loria, José Cuervo

Casa Cuervo not only integrated two businesses separated by over 5,000 miles with different systems and languages, but also revolutionised its treasury operation into a truly global one. It has successfully undergone a treasury transformation that today makes it one of the most important in Mexico and, indeed, globally.

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Photo of Fabio Monico, Bank of America Merrill Lynch and Maria Isabel Loria, José Cuervo.

Maria Isabel Loria

Group Treasurer

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Casa Cuervo produces and markets tequila. The company is based in Mexico City, Mexico and now operates as a subsidiary of Becle, S.A. de C.V. an international spirits company.

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Cash management integration of Mexican tequila and Irish whiskey producer

The challenge

In 2015, Casa Cuervo, the largest tequila producer in the world, acquired Old Bushmills – the world’s third largest Irish whiskey company – embarking on a major integration project of these two companies. Additionally, in 2016, Casa Cuervo strengthened its distribution model and network by establishing a master distributor company based in Dublin, putting a big focus and effort on treasury centralisation and integration.

CEO, Juan Domingo Beckmann Legorreta, hired key people from various regions to manage the newly-expanded company and its treasury area was challenged to develop a global strategy to integrate and obtain control of Old Bushmills’s operations based in Dublin. Maria Isabel Loria, Group Treasurer explains, “We needed to optimise our treasury model: centralisation, standardisation and automation of core treasury processes, consolidate our banking providers and, for the first time, implement an in-house bank with host-to-host solutions.” Additionally, a new multi-currency solution was needed from a single bank that could handle global information reporting, multi-currency payment generation and automated reconciliation for its receivables. “Our top priority was to have control of operations on a global basis from our Mexico HQ.”

The solution

The company implemented a single bank platform with a local bank for regional operations. It created a shared service centre (SSC) to provide standardised services across business units and the regions. Working with Bank of America Merrill Lynch (BofAML) it consolidated its bank providers from eight to two – BofAML and a local bank in Mexico. Working together, fully integrated and automated operations were put in place across their businesses worldwide.

“During the past five years, Cuervo has been enrolled in a relentless pursuit of excellence and innovation in every aspect of our business. The Adam Smith Award for the Best Global Cash Management Solution recognises that by transforming our treasury’s model we are on the right track in our effort to become a global spirits company by integrating the different parts of our business. With our new global treasury model we have laid the foundation to continue expanding our global franchise, integrating new treasury’s in a seamless and efficient fashion.”

In US dollars, the bank implemented a depository structure for its corporate collections that has over 110 accounts. Reporting has been mapped with its ERP (SAP) system. Loria comments, “We process all our multi-currency payments through the global bank via wire transfer, faster payment and ACH. In order to offset treasury fees, the bank put into effect an Earning Credit Rate solution for our operational balances. Additionally, we use CashPro™ FX to streamline our foreign currency payments.”

In Mexican peso, the bank provides a real-time zero balance account structure for the company’s corporate collections and payments. Furthermore, a daylight overdraft was set up to ensure the timely function of its structure.

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Best practice and innovation

Not only did the company integrate two businesses separated by over 5,000 miles with different systems and languages, but also revolutionised its treasury operation into a truly global one. It has successfully undergone a treasury transformation that today makes it one of the most important in Mexico and, indeed, globally. An extensive product mix was implemented ranging from receivables to payments with one global multi-currency cash management platform.

The company’s treasury function now has the visibility and control that is required to manage a global organisation. With real-time knowledge of its exact cash positions globally it can maximise returns on any excess cash. With its centralised and automated global platform, the treasury team no longer needs to deal with manual processes but rather can focus on continued innovation.

Loria concludes, “With our new platform in place, we are well-positioned to integrate Proximo Spirits another subsidiary of Becle in the USA to the model. Next steps are to define governance and risk management protocols and set-up our KPIs.”

Key benefits

  • Three regions fully implemented.

  • Reduced banks from eight to two.

  • Complete view of global liquidity.

  • Reduced fees.

  • Increased automation and reconciliation.

  • 200+ virtual accounts implemented.

  • Improved cash planning.

  • Euro, US$ and Mex peso solution established.

Portrait of Maria Isabel Loria

Maria Isabel Loria

Group Treasurer

As Group Treasurer, Maria Isabel Loria is responsible for the global treasury operations across Jose Cuervo’s worldwide business. Given her broad experience in the banking industry where she worked for over ten years in several executive positions in Mexico and NY, Maria conceived and led the transition of the treasury’s model, focusing on global treasury integration and transformation that resulted from M&A transactions and providing the vision and strategy of the treasury functions for the global organisation.

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