The challenge

Prior to its treasury transformation, General Mills Inc. had a fragmented banking set-up, with a multitude of bank accounts across multiple legal entities across many different banking partners in 11 countries in Asia Pacific. This set-up caused a host of problems: cash positions were managed in-country, resulting in trapped cash, poor visibility and minimal investment opportunities.

• The region did not have a treasury management system that was fully integrated with its ERP system.
• Bank statements were manually reconciled and accounting entries were also manually entered into its ERP.
• All aspects of treasury were managed locally, including the management of daily cash position, intercompany and third party loans, investments, foreign exchange and guarantees.

Christopher Emslie, Regional Treasurer Asia Pacific, identified the following aims:

• Centralised with solutions that support cost-efficient banking.
• Have access to group liquidity.
• Utilise state of the art technology.
• Have reduced local cash administration.
• Achieve streamlined cash linked processes.
• Have active asset management services.
• Ensure adherence to the local tax and regulatory environment in Asia Pacific.

Most importantly, General Mills Inc. had a goal to create regional cash concentration opportunities, reporting and automation mechanisms, as well as to address inefficiencies driven by a fragmented operating structure.

The solution

General Mills worked with its bank to implement a solution which drastically rationalised its banking relationships and account structure to one/two accounts per entity across the markets in scope. Virtual accounts and a cross-currency payments solution were adopted to minimise non-core currency accounts, reduce idle balances and eliminate unnecessary FX exposures.

The company centralised liquidity through domestic and cross-border cash pooling structures, enabling it to gain better cash visibility and make more informed investment decisions.

The company now utilises a single ERP interface with the bank’s seamless plug-and-play SAP integration solution and has standardised host-to-host connectivity alongside a centralised electronic banking platform administration for all markets.

The solution facilitates cross-currency payments combining the process of dealing, payment execution and settlement into a single automated process and the company has streamlined legal documentation structures across all markets for ease of onboarding.

Reconciliation is improved with the use of payer identification and an account receivables manager platform with enriched virtual account statements. This further aids General Mills Inc’s vision for an in-house bank in future. Real-time cash visibility is now possible through API notifications for instant balance reporting as part of its future roadmap.

Importantly, Deutsche Bank has structured its solutions in a way that not only ensures sustainability and flexibility to withstand regulatory changes, but also the scalability required to accommodate General Mills Inc’s evolution and growth.

Best practice and innovation

The bank leveraged its extensive experience with FMCG corporates of similar profiles, needs and objectives to suggest solutions to meet General Mills Inc’s overarching goals of consolidation, centralisation, liquidity management and optimisation.

Understanding that Asia is a heterogeneous region, solutions needed to be tailored to meet the challenges unique to each market. This was particularly important when addressing the specific needs in China, India, Korea and Thailand.

Key benefits

• Regionally consistent payments and collections.
• Drastic reduction in the number of accounts.
• Full automation of SAP workflow.
• Easy and streamlined on-boarding experience.
• Regionally centralising liquidity.

“The solutions have helped to meet our objectives of centralisation, liquidity and optimisation. The solutions are not only designed to address the problems of yesterday but are flexible enough to accommodate our evolution and growth. If we accept Asia is not a ‘one size fits all’ region, the solutions are regionally consistent, able to be deployed locally from one market to the next and recognise the local nuances,” concludes Emslie.

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