The challenge

Gore’s banking organisation had become decentralised without a global central structure and lacked full visibility into cash across a significant number of bank accounts with 30+ banks around the world. While Gore operated an international treasury centre in Luxembourg, the Asia Pacific (APAC) region was segregated and liquidity wasn’t fully connected to the global pooling structure, resulting in significant operating cash balances scattered across nine markets in APAC, including restricted markets like China and South Korea, yielding sub-optimal returns.

When Gore needed to move funds across entities to fund working capital needs across the world, it faced foreign exchange conversion costs and required several foreign currency accounts, as well as challenges with restricted cash. Additionally, its cross-border, tax and non-bulk payroll payments required paper documents and visits to physical bank branches, while its daily receivables reconciliation process was highly manual and resource-intensive.

“We sought a regional cash management solution that could seamlessly integrate with our ongoing digital transformation project which involved extensive investments into SAP’s S/4HANA and Kyriba, close alignment of internal technology resources, and revamping of existing treasury processes,” explains Juha Rajuvaara, International Treasurer.

The solution

Gore began working with J.P. Morgan to implement innovative solutions incorporating global liquidity best practices and digitised tools to modernise Gore’s treasury and banking infrastructure across nine markets in APAC and seamlessly connect to its EMEA pool.

The company’s treasury teams in the US, EMEA and APAC designed a liquidity structure to access cash in the region and mobilise funds directly to its global single-entity multicurrency notional pool in Luxembourg under its in-house bank entity, and seamlessly utilise balances across regions without any loss of value.

Gore became one of the first companies to connect South Korea balances to a global pool through an automated cross-border sweep. The bank’s team in South Korea supported Gore’s local team in obtaining the necessary regulatory approvals from Bank of Korea. To further support Gore’s trade needs, the solution also includes an umbrella credit facility in Hong Kong to facilitate the issuance of bank guarantees and performance bonds.

Best practice and innovation

Gore’s regional approach to expanding its global pool, including automating cash from restricted markets, exemplifies best practices in global treasury management. Through smart deployment of new-age treasury technologies including API, machine learning, host-to-host, virtual branch and virtual accounts, Gore has rationalised its fractured banking structure, eliminated unnecessary accounts and streamlined end-to-end treasury processes.

The new liquidity structure gives Gore’s treasury team seamless movement of cash from the APAC region to a single-entity multicurrency notional pool in EMEA – optimising Gore’s internal cash utilisation and resulting in stronger returns on idle balances.

“With the solution integrated into our new ERP and TMS systems, we can rely on a robust bank integration and connectivity that promises to deliver increased efficiencies with time and allows us to refocus efforts on growing the business for the next few decades to come,” explains Rajuvaara.

Key benefits

• Cost savings.

• Headcount savings.

• Number of banking partners/bank accounts reduced by approximately 40%.

• Process efficiencies.

• Return on investment (ROI).

• Increased automation.

• Risk mitigated.

• Improved visibility.

• Errors reduced.

• Manual intervention reduced.

• Increased system connectivity.

• Future-proof solution.

This scalable solution allows Gore to adopt other technologies, including API and AI-powered cash insights and real-time ERP and TMS connectivity to equip its treasury with automated and streamlined processes that enhances treasury operations while maximising yields on cash balances.