GD solution allows payments in 130 currencies from one account
Published: Feb 2025
Best Foreign Exchange Solution
Highly Commended Winner
Kalbe International Pte Ltd
Photo of Winnie Yap, HSBC and Serene Ong, Kalbe International Pte Ltd.
Rudy Santosa Irawan
Director
Kalbe International Pte Ltd
Kalbe International Pte Ltd (Kalbe) is an international marketing company based in Singapore that mainly handles the import/export transactions of Kalbe Farma, Indonesia’s largest publicly listed pharmaceutical company. Kalbe is present in 12 markets globally and has dealings in more than 15 additional markets through trading partnerships.
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The challenge
The Kalbe Farma group has grown extensively over the past few years through several major acquisitions. The group was looking to establish a treasury centre domiciled under Kalbe International in Singapore as part of a move to ensure scalable growth and greater overall efficiency on transaction processing.
One area that was identified for optimisation was cross-border payments to suppliers across the globe, which had grown significantly in volume following the group’s global expansion. Consequently, this involved a greater amount of currency conversions, particularly in a number of exotic currencies (eg Indonesian rupiah, Philippine peso, South African rand and United Arab Emirates dirham), which resulted in multiple cross-border payment methods and processes.
For some markets, funds would first have to be converted and sent from a foreign currency account in Singapore, to an onshore foreign currency account in the target market, which were mainly held with local banks. Funds would then be converted onshore to the local currency, before being disbursed to the final beneficiary.
Kalbe observed inconsistencies in process and settlement times, and higher costs from transaction fees, bank account maintenance and sub optimal FX fees. The company also encountered challenges in payment reconciliation and gaining transparency on applied FX rates. A significant amount of time was also spent on sourcing and booking FX conversions for currency pairs.
The solution
Kalbe worked with HSBC to address this situation by implementing Global Disbursements (GD) – a solution that allows Kalbe to pay beneficiaries across the world in over 130 currencies from one account in Singapore.
Through this, Kalbe simply submits one batch payment file, which can include a mix of currencies, which are then automatically processed and disbursed in local currency through the lowest-cost rail where possible. As a result, Kalbe now has a single, standardised process for cross-border payments in all currencies, which are all sent directly to beneficiaries in their local currency. This eliminates the need for Kalbe to maintain additional foreign currency accounts in Singapore, and with local banks in their various other markets of operation.
The solution can also be scaled to cover additional currencies and markets as needed without opening additional currency accounts. In effect, this has allowed Kalbe to successfully centralise global payment processing to its treasury centre in a relatively short amount of time, while also providing the company with an easily scalable process for cross-border payments in line with its growth objectives.
The GD platform provides Kalbe with full transparency on the FX rate applied to payments, which is applied in bulk to all relevant currency pairs. This has eliminated the need for Kalbe to spend time obtaining and booking FX rates. All payments are also reported on one consolidated payment report per batch file, helping to automate reconciliation significantly.
Best practice and innovation
The Asia Pacific region is defined by its wide diversity of currencies and regulations dictating cross-border transfers. Traditional cross-border processes, however, can be tedious and characterised by sub optimal account structures and process flows to facilitate payments to certain restricted markets. This is particularly true for a company like Kalbe, which has grown rapidly over the past few years, and has come to hold multiple payment accounts held to pay beneficiaries across the globe. This solution has addressed all these challenges head on.
Key benefits
Cost savings.
Number of banking partners/bank accounts reduced.
Process efficiencies.
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Manual intervention reduced.
Future-proof solution.
Anne Suhandojo
Country Head of Global Payments Solutions, Indonesia, HSBC
As companies expand in a region as diverse as Asia, there is a greater need to find efficiency in transaction processing, especially for cross-border payments that involve currency conversions.
HSBC’s Global Disbursements solution was the perfect solution as it not only helped Kalbe streamline its payment processes, but also enhanced transparency and reduced costs. The simple but strategic solution enables them to efficiently manage payments in over 130 currencies from a single account, demonstrating scalability and operational excellence to continue their growth journey.
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The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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