The challenge

Yili Group suffered from numerous and scattered banking accounts, which were difficult to manage. Yili’s global cash management required bank accounts in 11 countries and regions around the world with more than 80 cooperative accounts with 20 banks, incurring enormous workload for global treasurers to manage multiple banking systems.

Since Yili became the exclusive dairy partner for the 2008 Beijing Olympic Games, the group has enjoyed enormous international growth in demand. Meanwhile, this rocketing global expansion necessitated higher standards for the liquidity and risk management of offshore funds and accounts.

Yili Group’s overseas subsidiaries are widely distributed in the world, lacking a globally unified online treasury management platform.

The solution

Bank of China (Hong Kong) Limited was tasked with implementing a centralised treasury management solution including comprehensive global account and cash management for Yili to mitigate the above-mentioned pain points in three phases:

Phase 1 – to achieve global account visibility.

Phase 2 – to achieve automated global fund concentration through online system – see diagram opposite.

Phase 3 – a wide range of liquidity management functions will be provided such as fund planning and analysis, payment and collection management and foreign exchange management to help Yili further enhance its treasury management.

Best practice and innovation

In this project, Yili has transformed its treasury management and strengthened its treasury governance from scratch, which is not easy but necessary move for the group. The change in mindset and leap from zero to one is more important than continuous improvements made in further stages.

To conclude, this transformation project achieves notable results in managing and revitalising overseas funds to empower the global expansion at the group level and marks the Chinese dairy industry marching towards an advanced international level of treasury management.

Key benefits

• Cost savings.

• Risk mitigated.

• Improved visibility.

• Errors reduced.

• Manual intervention reduced.