Procter & Gamble, Highly Commended, Top Treasury Team Asia 2016

Published: Jan 2017


Photo of Melvyn Low, Citi, Jewel Co Villanueva, Mabel Ee, Jelina Bargas and Nicolas Defauw, Procter & Gamble.


Establishment of a supply chain finance programme with over 200 suppliers on-boarded, keeping pace with regulatory change, best practice and innovation evidenced and collaboration as a strategic imperative demonstrate why the treasury team at Procter & Gamble were awarded highly commended in this years’ Top Treasury Team category.

Procter & Gamble Co., also known as P&G, is an American multinational consumer goods company headquartered in downtown Cincinnati, Ohio, United States, founded in 1837 by William Procter and James Gamble, both from the United Kingdom.

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The challenge

Procter & Gamble is one of the largest and most recognised players in the fast-moving consumer goods (FMCG) sector with a broad and deep presence across Asia Pacific. To support such a large and intricate business operation, P&G is constantly looking for ways to effectively use its resources to balance a multi-dimensional structure. The result of this enterprise is a highly efficient and centralised treasury organisation, unlike any other major players in the FMCG industry.

At a broad level, P&G’s treasury organisation consists of two complementary Centres of Excellence, both working hand-in-hand to define and execute P&G’s treasury vision and goals.

Regional Treasury

  • Alice Zeng, Regional Treasurer, based in Guangzhou China who heads the Regional Treasury team.
  • Tracy Deng, China Treasury and Banking Head, based in Guangzhou who covers China.
  • Jelina Bargas, Asia Pacific/HKTW Treasury Head based in Singapore who covers 13 countries across Asia with her team of Asia Treasury Managers namely Jewel Co Villanueva and Mabel Ee.

The Regional Treasury team assumes several important roles within the company, in part because of the regulated regional treasury environment that brings commercial challenges for the business. Alice and her team play a considerable strategic role within P&G’s treasury organisation; primarily responsible for identifying, developing and spearheading new projects and ventures that would create value to enhance, augment and extend P&G’s cash management and treasury capabilities.

Some of the work the Regional Treasury team does on a regular basis:

  • Ensures a holistic cash and liquidity management and good governance to support accelerated business growth in Asia.
  • Minimises and manages controllable risks and exposure at the normal course of business against a volatile environment and prepare contingency plans for uncontrollable circumstances.
  • Drives execution excellence through capability building for the treasury organisation, which extends to the business.
  • Drives standardisation and simplification to improve work/life balance and enhance business performance.
  • Manages regional bank relationships.

Global Business Services (GBS) – Banking

  • Headed by Cheryl Venturina, Service Manager, GBS Treasury Banking based in Manila who oversees the end-to-end banking services through its front (short-term cash and liquidity management), middle (compliance, controls and bank relationship management), back (payments, collections and treasury transactions execution) and bank reconciliation (cash accounting) offices.

The GBS Banking team lead daily operations, as well as implement and execute projects identified. The breadth of treasury processes managed by the team extend beyond accounts payables and receivables, encompassing liquidity management, foreign exchange, onshore cash and money market investment and regulatory compliance. The GBS Banking team is focused on delivering end-to-end operations with excellence whilst working on exploring, leading and executing solutions that create value to continuously improve scale and efficiency. In addition, the team also ensures compliance of operations with market regulations and demonstrates agility in adapting to any impact of changes on treasury operations.

The Adam Smith Awards Asia recognition is a strong validation that our current structure is indeed efficient and best in class. It is a good testament that Procter & Gamble have clearly demonstrated not only best practice and innovation but also collaboration and a real appetite for success. The recognition reflects the focus, discipline and knowledge base that the P&G treasury organisation has within it.

Alice Zeng, Regional Treasurer

As Alice Zeng, Regional Treasurer explains, “The Regional Treasury and GBS Banking teams have a strong partnership that successfully delivers on common overall company objectives, with each team playing to its strengths.”

  • The structure enables seamless execution of major financing transactions and projects whilst carrying out business-as-usual objectives of holistically managing P&G’s working capital requirements for the entire region.
  • The cash management objectives are successfully implemented and enabled vis-à-vis the efficient organisation structure.

The solution

Moreover, the unique treasury operation at P&G means smart and scalable solutions are ever-present. Here are two examples of the inventive solutions recently implemented:

Establishment of supply chain finance (SCF) programme

Over the last 18 months, P&G has effectively rolled out its SCF programme across 12 countries across Asia and has currently over 200 suppliers on-boarded to its programme. To ensure the successful rollout of this programme in Asia, P&G placed together a cross-function team with members from Regional Treasury, GBS and Procurement, all of which worked diligently with P&G’s banking partners to ensure its suppliers were able to access a stout and robust SCF programme. As a result, P&G was able to increase its payment terms offered to suppliers to 75 days, resulting in a significant increase in the company’s DPO and enhancing its working capital position.

Moreover, the SCF programme also strengthened P&G’s relationship with its key suppliers as they are now able to turn their receivables into cash faster, with greater access to financing to keep their day-to-day operations running smoothly.

Keeping pace with regulatory changes

There is little doubt that the pace of regulatory changes has accelerated in recent times, which places considerably pressure for companies to be agile. To stay ahead of regulations, P&G has put in place a regular and systematic approach to ensure the company not only addresses urgent changes that require immediate modifications, but also strategically reviews more long-term process changes to ensure business continuity. A strong partnership exists with Citi to regularly review operations compliance against P&G’s business model through the bank’s external intelligence as well as country and regulatory expertise and fluency. For example, the team regularly validates and checks that all cash transactions are compliant to current business design and local market regulations and reporting requirements.

Codenamed ‘Project Fortress’, the team schedules a fixed calendar to periodically review key regulations on a country basis that would impact the company, P&G is able to quickly adapt to meet new regulatory requirements and create value for its shareholders. Since its inception, the project has seen the following benefits:

  • Identified opportunities for value creation (ie change to optimal currencies to save on FX costs).
  • Strengthened controls by identifying areas with potential audit risks (ie robust checks before payments are sent to the bank).
  • Established a compliant and simplified central bank reporting process with strong collaboration with Citi.

Best practice and innovation

Throughout P&G’s history of over 175 years, the company has grown in strength, diversity and market-share. P&G is no stranger to the philosophy that innovation is the distinction between front runners and followers. Inspired by their purpose to recognise innovation as a cornerstone of success, the company has rightly placed value on new consumer innovations and challenge orthodoxy. The Regional Treasury and GBS Banking teams are similarly driven by the same principles, with several outstanding best practice initiatives. Among them are:

Collaboration as a strategic initiative

Distinct from other industry partnerships, P&G is a true champion of co-creation and teamwork. In the spirit of collaboration, P&G and Citi have institutionalised a formal ‘Joint Business Planning’ process, which meets on a quarterly basis to share key objectives for the immediate quarter as well as bounce off new ideas and opportunities for treasury improvement. This quarterly process helps facilitate and warrants a sense of ownership and responsibility on both organisations to continuously evaluate existing processes and structures to the benefit of the company. Through the discipline of having to recommend areas for improvement quarter after quarter, helps ensure P&G’s banking set-ups stay highly efficient and market-leading in an ever-evolving marketplace.

We have learnt to quickly adapt to regulatory and market changes as well as deftly adopt processes and structures to support our treasury functions across Asia Pacific.

Alice Zeng, Regional Treasurer

Since its inception, the Joint Business Planning process has helped to:

  • Sustain a strong partnership to deliver risk management solutions in volatile markets to validate end-to-end repatriation capability.
  • Increase collaboration to engage central banks to drive regulations compliance and other approval of offshore transactions.
  • Drive the design and implementation of Document Warehousing – a strategic partnership to augment foreign currency payments process in a way that ensures compliance to regulatory requirements supported by a seamless payments process.
  • Drive the exploration and design of new value-add services to create robust payments compliance in certain markets with high regulatory requirements and regional interest optimisation.

Placing employees at treasury top-of-mind

Guided by one of P&G’s core principles in believing that the interests of the company and individuals are inseparable, P&G is now looking to embark on a treasury journey to enhance its payroll services for its employees by giving power to its own people. With approximately 2,700 expatriate employees across Asia Pacific, the company is developing a solution which would enable its employees to self-determine the composition of currencies of their compensation, making it easier for its employees to remit funds back to their home countries, with P&G remunerating the costs of funds transfer and FX charges back to its employees. This market-leading project will leverage Citi’s WorldLink® Payment Services, which has more than 135 live currencies and is a complete global transaction solution that makes cross-border payments simple and secure.

Zeng concludes: “P&G is in an industry which is fast and furious in equal parts. To stay ahead of its competition, it has learnt to quickly adapt to regulatory and market changes as well as deftly adopt processes and structures to support its treasury functions across Asia Pacific. No stranger to centralisation, P&G’s Regional Treasury and GBS Banking teams work together like ‘two peas in a pod’ to enhance efficiency and improve visibility. Both teams have imbibed P&G’s overall business model, values and principles to establish one of the most polished and sophisticated treasury teams in the industry, evidenced by its market-leading solutions, close work with its banking partners and its fortitude to explore new ways of working in an intricate Asian environment.”

Key benefits

  • Working capital optimised.
  • First class relationships fostered.
  • Innovative FX solution as part of employee benefits.

Key learning points

A healthy dissatisfaction for status quo, agile and well informed treasury organisation is a key enabler in the current evolving financial environment. Establishing a highly efficient, simplified and agile structure operating with execution excellence is a good recipe in these changing times.

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