SCF solution encourages construction industry to go paperless
Published: Feb 2025
Best Funding Solution
Highly Commended Winner
Dragages Hong Kong
Loïc Montini
CFO
Dragages Hong Kong is part of a globally respected network of construction companies, headed by Bouygues Construction. For over 65 years the company has driven innovative and smart construction across its civil, building, electrical and mechanical divisions in Hong Kong.
in partnership with
The challenge
The construction market in Hong Kong is characterised by traditional payment practices, with many companies relying primarily on cheques and manual paper transactions. This conservative approach reflects a deep-rooted culture within the industry, which often results in delays in payment processing and inefficient cash flow management. Consequently, contractors and sub-contractors frequently face extended waiting periods for payment and additional manpower is required to handle transactions. This shortage of working capital affects project timelines and operational efficiency.
The solution
Dragages partnered with HSBC for this unique supply chain finance (SCF) programme. Under this programme, invoices and payments can be processed on HSBC’s supply chain finance platform, resulting in efficiency improvements, and reduction in cheque issuances and paper payments. This has the potential to transform the construction services industry in terms of improving sustainability.
By setting up the SCF programme and providing its suppliers with access to financing, Dragages is aiming to reshape the construction industry by incentivising suppliers to use the HSBC supply chain finance platform, and hence move away from traditional payment solutions such as cheques and manual payments. The programme has been structured to cater to Dragages’ dynamic business model where the numerous sub-contractors across multiple projects will have the opportunity to join this programme.
Through this programme, HSBC has demonstrated its bespoke supplier engagement and implementation to fund the construction services industry and help sub-contractors transition to more electronic modes of payment. This strategic partnership between the bank and Dragages enhances the overall efficiency and brings a paper-less solution to the industry.
“Winning an Adam Smith Award Asia is a great honour for Dragages Hong Kong, symbolising our commitment to streamlining processes and championing sustainability in the construction sector. This award solidifies our standing as a forward-thinking entity that values financial innovation and operational excellence. In essence, it serves as a testament to the hard work, vision and transformative impact of our team in reshaping financial practices within the industry.”
Loïc Montini, CFO
Best practice and innovation
This solution is not just for the efficiency improvement of Dragages but also an initiative that is aimed to reshape the construction industry; to eventually move away from traditional payment solutions by directly integrating Dragages’ current ERP and HSBC’s SCF platform to deliver approved invoices and payments digitally and securely to Dragages’ suppliers. The early financing option is embedded as an incentive for suppliers to onboard onto the programme and move away from manual payments and cheques.
On the other hand, the bespoke implementation set up adds value to Dragages as contractor and its sub-contractors in terms of streamlining the reporting requirement requested from the client. This reporting requirement to link the accrued payables and payments with the performance milestone of contractor and sub-contractor is commonly seen in the public construction area.
Key benefits
Cost savings.
Headcount savings.
Process efficiencies.
Increased automation.
Risk mitigated.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
“We continue to work with our sub-contractors to reduce manual processes and improve operational efficiency, with the determination to remove 500+ cheques per month,” explains Loïc Montini, CFO. “The bespoke arrangement has been tailored-made for each project and we have been able to come up with constructive ideas with HSBC to implement project specific requirements under the supply chain programme.”
Abhishek Chopra
Managing Director, Head of Solution Structuring, Global Trade Solutions, Asia Pacific, HSBC
Our bespoke supply chain financing solution for Dragages not only optimises their working capital, thereby enhancing operational efficiency, but also provides timely access to finance for their suppliers. We hope this will catalyse the transition away from manual, paper-based transactions for the construction industry as whole.
in partnership with
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
Please enter the email that you signed up with below. If your email is
connected to a member account, we will send you a reset link.
This website uses cookies and asks for your personal data to enhance your browsing experience. We are committed to protecting your privacy and ensuring your data is handled in compliance with the General Data Protection Regulation (GDPR).
