Minerva “beefs” up working capital with receivables discount solution
Published: Sep 2024
Best Supply Chain Solution
Highly Commended Winner
Minerva Foods S.A.
Photo of Nina Poyet, J.P. Morgan.
Edison Ticle De Andrade Melo e Souza Filho
Chief Financial Officer
Minerva SA (Minerva) manufactures and markets beef and its by-products. The company has industrial units in Argentina, Brazil, Colombia, Paraguay and Uruguay. It has a presence in Asia, Europe and the Americas and is headquartered in Barretos, Sao Paulo, Brazil.
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The challenge
Brazilian meat processing and slaughtering group Minerva was struggling to efficiently manage its working capital. Accounts receivable is the most important source of the company’s working capital and exports account for roughly 70% of its operations given the company’s more than 500 global buyers. But efficiently managing working capital was hindered by treasury and export teams manually performing tasks like invoice discounting, counterparty limits and additional risk mitigation leading to time consuming and less productivity.
Moreover, as Minerva’s sales increased in global markets, the need for more effective treasury tools and processes became clear. Improving receivables management would improve working capital management, making cash more readily available and increasing agility, flexibility and accountability.
The solution
Minerva rolled out a solution that combined cash management and receivables discounting. The two-pronged solution helped mitigate payment risk from the company’s global buyers domiciled in 23 countries by facilitating early payments.
Minerva used J.P. Morgan’s receivables discount solution, integrating a receivables programme that connects to the company’s ERP for better cash management. The programme went live in June 2023 and in the first eight months, Minerva discounted more than 4,000 sales invoices from clients across countries in Latin America, Europe and Asia. The programme reduced Minerva’s receivables maturity from 60 days to two days.
Improving working capital has helped the company improve efficiency and increase free cash flow generation, supporting company´s growth and diversification strategy.
“Having solutions that can boost our working capital and administration is key to successfully continuing our global journey,” says Edison Ticle, Minerva Foods’ CFO.
The solution also significantly reduced the amount of work for Minerva’s treasury team. It not only eliminated the need to submit thousands of invoices, but also increased global sales. Now, Minerva’s treasury and export teams can focus on more strategic tasks.
Minerva expects to continue strengthening its domestic and global client base by adding value to international distribution. The company also plans to increase the size of the programme with J.P. Morgan to support the overall business goals of its South American subsidiaries. In addition, it will use the technology and process that it built to replicate the solution with its partners.
Best practice and innovation
Minerva Foods showcases best practices and innovation by prioritising efficient working capital management and leveraging technological solutions. This strategic approach supports Minerva’s business objectives and sets a precedent for industry excellence in financial management and innovation.
Key benefits
Process efficiencies.
Risk mitigated.
Errors reduced.
Manual intervention reduced.
Increased system connectivity.
Carla Manso
Executive Director, J.P. Morgan Payments
When it comes to promoting global business, Minerva Foods started an innovative journey by using sales finance solutions for enabling the enhancement of their accounts receivables and achievement of better cash management. This resulted in an improvement in their working capital metrics and solidification of their international presence across the globe.
J.P. Morgan is honoured to have Minerva Foods; a Latin American company being recognised for a highly recommended – Best Supply Chain Finance Solution. Winning an international award like the Adam Smith Awards is a great testament of Minerva treasury team’s hard work in collaboration with their senior management.
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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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