The real deal

Published: Jan 2015

Celebrating the achievements of corporates from across the APAC region, the Adam Smith Awards Asia Gala Presentation Lunch which took place on 13th November 2014 saw 142 of the brightest thinkers in the industry come together in Singapore to share their stories of success.

In Asia Pacific, as well as globally, the years following the global financial crisis have been immensely challenging. Yet, treasurers across the region have stepped into the spotlight to meet this test head-on, successfully guiding their companies through these difficult times. In doing so, corporates have shown great dedication, ingenuity and innovation, developing industry-leading solutions to solve a multitude of complex problems.

Recognising the extraordinary efforts of treasurers in the region, Treasury Today Asia introduced its Adam Smith Awards Asia programme to the market last year, building on the success of the global Adam Smith Awards programme. The judging panel was inundated with nominations from corporates across every industry sector and from countries including China, India, Singapore, Hong Kong, Malaysia, Thailand, Korea, Japan and Australia.

After much deliberation, well-deserved winners were selected in each of the 15 award categories, in addition to a number of highly commended projects that the judges felt also deserved recognition. And despite the wide geographical footprint of the corporate treasury departments honoured with an award, 142 corporates and their strategic business partners gathered at the Grand Hyatt hotel in Singapore on 13th November 2014 to take part in the inaugural Adam Smith Awards Asia Gala Presentation Lunch.

The event began with a welcome reception and the room was abuzz with the attendees acquainting themselves with peers and sharing stories of their award-winning projects. Following the reception, all guests were ushered through to the Grand Ballroom where Angela Berry, Publisher, Treasury Today, gave a welcoming speech. Lunch was then served, but not before the room was plunged into darkness as the kitchen was dramatically opened with much fanfare.

It was then time for the corporates to take centre stage as each Winner and Highly Commended corporate was invited on stage to collect their award. The pride that accompanies such recognition was clearly visible on the face of each winner and images of their awards were quickly being shared with colleagues, friends and family via social media.

Deserved recognition

“An event such as the Adam Smith Awards Asia is certainly overdue for a region that has been performing particularly well in recent years while many are still struggling,” says Calvin Lee Manager, Asia Pacific Treasury Centre at LG Electronics Singapore. “Receiving an award gives great recognition to the journey the treasury team has been on in recent times.”

This thought is echoed by David Gaythorpe, Finance Director SEA and Pacific at adidas Singapore who says; “It is great external recognition. The Adam Smith Awards have a great reputation in the treasury world.”

For all corporates in attendance, receiving an Adam Smith Award was not only a huge honour but also motivation to go on and do other things. “Winning the Adam Smith Award is a great achievement for us,” says Harjeet Kohli, Group Treasurer, Bharti Airtel, Winner, Treasury Today Asia’s Top Treasury Team. “The team gets the right level of motivation and drive to continue to do better. I also think the accolade adds accountability to the team to continue to strive and raise the bar to retain such status – again a worthy motivation.”

Another theme mentioned by attendees at the event is that winning an Adam Smith Award also sets a benchmark for the industry to work towards. “In a tough environment where all corporates are striving for efficiency, the Adam Smith Awards provide a great platform for companies to benchmark themselves against their peers, their competition and also companies in different industries,” says Ashish Bhardwaj, Senior Credit Manager at Microsoft. “Thanks to the Adam Smith Awards Asia event, we have seen that there has been lots of innovation in the region and there is plenty of best practice. The challenge now is to learn from this and continue to innovate.”

In the quest to find the most innovative solutions, the Adam Smith Awards Asia recognise that it is not always the large household name organisations such as Microsoft and LG Electronics who are doing great things. Take for example MSF Sugar, the integrated grower processor, marketer and exporter of raw sugar based in Gordonvale near Cairns in Australia, who received a Highly Commended award in the Best Risk Management Solution category. “It is great to receive recognition for what we have done,” says Gunnar Andresen, Commercial Manager at MSF Sugar. “It is also fantastic to see what some of the largest companies in the world are doing and share our stories. We will take the award back to our company and share the success with our sugar cane grower suppliers and other stakeholders.”

Winners roll call

The diversity of companies honoured in this year’s Gala Presentation Lunch reflects the range of nominations submitted to the judges – which totalled 162 nominations across the 15 categories. The full case studies of all winners and highly commended appear in the Treasury Today Adam Smith Awards Asia Yearbook, but in the meantime, here is a brief snapshot of the winners in each category and their solutions.

The headline award is the Top Treasury Team Asia award, which is open to any treasury team who have developed solutions to tackle a multitude of challenges, added real value to the overall organisation and raised the bar for treasury operations globally. The winner of this prestigious award in 2014 was Bharti Airtel, based in New Delhi, India.

Bharti Airtel’s truly outstanding submission detailed a treasury transformation project across seven key pillars, covering that entire spectrum of the treasury function, which has delivered some impressive benefits. These include cost savings, KPI improvements and reduced risk. The submission raised the bar and demonstrated the innovation and ingenuity that the Awards represent.

The Best Cash Management Award is open to any company that demonstrates best practice and innovation in this important treasury discipline. Hitachi Data Systems Corporation led by Brian King was 2014’s deserved winner. Hitachi transformed its cash management process through centralisation, consolidating its banking relationships and streamlining the overall process. The innovative use of host-to-host connectivity with its bank through its SSC centre ensured reduced touch points and delivered greater control.

Setting the standard

Increasingly, corporates are turning to benchmarking in order to assess their performance, against both internal markers and external companies. The award for Best in Class Benchmarking in 2014 went to Amway India Enterprises, whose project was carried out as a reaction to its growing business volumes across India and its banking complexities in the country. The internal and external benchmarking project focused on identifying the important benchmarks of success around multiple areas. The results of the project drove the implementation of India’s first automated, multi-bank pooling structure proving that complex banking structures pose no barrier to achieving an efficient, centralised liquidity management model.

Australian beverage group, Treasury Wine Estates (TWE), was awarded the Best Card Solution. Its corporate card project not only provided a single global platform for all card payments but also connected it to Australia’s common terms deed legal agreement. This unique and innovative solution has allowed TWE’s corporate cards to integrate with its other core debt facilities, creating a value-add, working capital financing solution.

With the cash-based nature of many Asian economies, an efficient working capital solution is vital. For example, in India, where cash and cheques remain the predominant payment means, operating across a country of such geographical breadth makes the collection of cheques a challenge, especially in remote locations. In overcoming this challenge, METRO Cash & Carry India received the award for Best Working Capital Solution. Its image-based clearing solution has saved an average of two to five days on cheque processing times. Also, a supplier finance programme was developed that streamlined the process through simplified documentation and also saw the bills discounted and the proceeds remitted to suppliers on the day of request.

The winner of the Best Financing Solution is another India-based firm. Mahindra & Mahindra (M&M) the multinational automobile manufacturing organisation faced a number of issues around their long-term debt financing. Interest volatility meant its financing, completed with put and call options, hardly survived beyond ten years. The desired solution was to issue a 50 year bond with an interest rate of 9.55% p.a. with no put or call option. The M&M treasury team was able to successfully execute the deal and, in doing so, has created a new market instrument for that tenor in India. This means that Indian corporates can now look to the domestic as well as the global markets to raise long-term funds.

When expanding offshore, a company faces many new challenges, one of these being heightened FX risk. This was an issue for Best FX Solution winners Ingredion Incorporated, whose purchase of National Starch saw them become a truly global company. To overcome the FX challenges this presented, the company implemented a systems-based solution that would look to consolidate all the global currency and risk management processes in Asia Pacific. This was achieved using a single bank and currency platform that would be integrated with Ingredion’s existing treasury technology across the region. The decentralised approach is unusual yet has offered increased FX benefits of $1m and a reduction in bank fees.

Over the past 12 months all eyes have been on China as its deregulation agenda has created a number of opportunities for corporates, not least where trapped cash is concerned. The sheer volume of nominations for the Adam Smith Awards Asia emanating from China and the innovative solutions that corporates had developed there meant that the country deserved its own award category. The winner of the Best Solution in China went to Bunge (Shanghai) Management. Utilising the SFTZ, Bunge has developed a two-way RMB cross-border sweeping structure, allowing for greater efficiency in the utilisation of its funds in China and moving trapped cash out of China. The innovative solution allows Bunge to make intercompany RMB loans from the Shanghai entity to the regional treasury centre (RTC) in Singapore, as well as from the RTC to the Shanghai entity, and daily sweeping is also possible.

Full of promise

The winner of the One to Watch award, issued to companies who have ongoing projects that have the potential to create great benefits, was the Chinese National Petroleum Group (CNCP). The massive internationalisation of CNPC’s business has meant that the treasury has had to evolve to ensure it can meet growth requirements and the additional complexity brought by operating worldwide. To ensure CNCP’s treasury could step up to the plate, the department launched a re-engineering project. This involved the implementation of best practice solutions across the board and delivered significant efficiency improvements to the treasury function. Treasury Today Asia will certainly be watching further developments from this innovative treasury department.

As the technology that corporates are able to access in the region evolves, so do the opportunities to re-engineer treasury processes. Honeywell is one company that has taken full advantage of this opportunity by reducing the operational risk associated with having multiple users of its electronic banking platform. The ‘three instance approach’ which Honeywell has deployed allows the treasury team to monitor and track the users of the company’s electronic banking platform, ultimately reducing the risk of fraudulent activity occurring. This solution saw the Honeywell treasury team awarded the Best Process Re-engineering award.

Sometimes a solution can go beyond benefiting just the company, to benefit the economy of a country. This is the case for the Best Risk Management Solution winner, The Clearing Corporation of India. By adopting a settlement procedure similar to a CLS bank, it has been able to improve transaction settlement efficiency, mitigate risks, insulate the Indian financial system from operations-related shocks and undertake other activities that help to broaden and deepen the money, debt and FX markets in India. Thus, the solution has a direct positive impact on the Indian economy, which is one of the largest in the world.

First class thinking

With centralisation firmly on the agenda of companies across the region, many treasurers are looking closely at their banking relationships. Blackstone is one such company and it was awarded the First Class Bank Relationship Management award. The company was looking to establish an Asian focused real estate fund that would allow it to target business opportunities across a number of different countries in the region. As part of this process, Blackstone revisited its banking requirements to help the company centralise cash management and FX execution in the region. The result was the use of a single bank across the region.

The Judges’ Choice award recognises a team that develops a solution that is just that little bit different. This year, Larsen & Toubro led by Harish Barai, was awarded the accolade for their analysis of the economic and political landscape of India over the past two years. Through carrying out this analysis, the team was able to protect the company from instability in the country and its markets.

Finally, the Treasury Today Asia Women of the Year was Shirley Hiew, Global Cash Lead; Treasurer, Asia Pacific at DuPont. Described as having a unique combination of hands-on leadership and a great strategic vision around her areas of responsibility, she keeps raising the bar for herself and her team. Shirley was nominated by the Editorial Team here at Treasury Today Asia and our nomination has been endorsed by a number of senior contacts within the industry, including a number of Shirley’s colleagues at DuPont.

Your time to shine

Do you think you and your team can beat the class of 2014? Nominations for the Adam Smith Awards Asia 2015 open on 8th June 2015. We look forward to celebrating your success in Singapore in November 2015.

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