Chile’s Agrosuper leaps ahead on transformation journey
Published: Sep 2024
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Agrosuper S.A.
Photo of Vasco Grigolo and Maria Jose Vial, Agrosuper S.A.
Vasco Grigolo
Corporate Finance Manager
Agrosuper S.A. is the largest producer of protein foods in Chile and the third largest salmon producer in the world. With 26 local distribution centres and 11 international offices, Agrosuper exports to 66 countries and supplies 66,000+ clients.
The challenge
For corporates seeking how best to centralise a decentralised treasury function and reduce all the associated operational challenges and risk, Chilean food and salmon producer Agrosuper offers a valuable case study.
Agrosuper’s decentralised treasury team was juggling multiple sources of information, often manually, including different bank statement formats. The company managed international payments through manual templates – sometimes even corresponding with its banks via letter – while manual processing currency purchases, and the use of physical tokens for payment approvals on various web platforms, added to the challenge.
Centralisation wasn’t a new concept – the company has been gradually centralising its treasury function in line with acquisitions. But Agrosuper wanted to speed up the process with a new set of sweeping objectives. That list included reliable cash flow information and visibility – early in the working day; optimised reporting processes that eliminate the risk of manual errors in payment processing; automatic account reconciliation processes and leveraging data to support cash flow projections and increase control over the group’s subsidiaries.
The solution
In partnership with Bank of America, Agrosuper overhauled its treasury management function. Today, the treasury function is fully centralised and automated using cash pooling and host-to-host (H2H) transmission with Bank of America.
Agrosuper’s treasury use digital channels including CashPro Online, CashPro App (mobile), and CashPro Connect (H2H) for payments and reporting, foreign exchange and international payments traceability (Swift GPI).
The next step in the company’s journey will integrate APIs to continue improving treasury management processes.
“The treasury centralisation model proves to be valuable as it reduces costs, improves process efficiency, increases automation, mitigates operational risks, enhances cash visibility and forecasting, and increases the synergy between the two line of business ecosystems,” says Vasco Grigolo, Corporate Finance Manager.
Best practice and innovation
Agrosuper’s focus on treasury innovation and process automation has replaced manual practices and allows the team to focus more on value-add cash management. Another plus is that the overhaul has provided the company with timely online visibility and the ability to initiate and manage transactions online.
Substantial qualitative and quantitative benefits for the company include the ability to monitor and optimise the cash conversion cycle, keeping current accounts up to date. For example, it has been possible to recognise income in advance, reducing the average days of collection (DSO). The company has also been able to harness investment in technology and cybersecurity to shield domestic and international payment processes through solutions, such as H2H, that has reduced the risk of fraud.
Agrosuper has implemented cash pooling for each line of business, optimising cash flow, streamlining fund flow and improving return on cash for over 20 entities.
This solution is unique given the scope, scale and complexity. Requiring a multi-year effort across multiple teams, with operations in different regions, languages, currencies, time zones and regulations.
Key benefits
Cost savings.
Headcount savings.
Process efficiencies.
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Number of banking partners/bank accounts reduced.
Manual intervention reduced.
Increased system connectivity.
Improved key performance indicator (KPI) metrics.
The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 389 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
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Substantial qualitative and quantitative benefits for the company include the ability to monitor and optimise the cash conversion cycle, keeping current accounts up to date. For example, it has been possible to recognise income in advance, reducing the average days of collection (DSO). The company has also been able to harness investment in technology and cybersecurity to shield domestic and international payment processes through solutions, such as H2H, that has reduced the risk of fraud.
