The intention under this pillar was to identify and run the most crucial projects regionally to extract maximum organisational efficiencies.
As the business had grown rapidly over the last three to four years with newer market operations launched, the Danone treasury team took the opportunity to conduct a deep dive of the last 12 months into all key processes and identify which would benefit from enhanced visibility via a centralised approach.
With a diverse set of processes and systems for each market, the existing process for FX risk mitigation was inconsistent. “We embarked on a comprehensive review of the policy with clear, regionally standardised processes and unified goals. The team then deployed relevant features of Kyriba to extract improved value from the FX exposures and obtain higher levels of transparency,” says Zurab Abutidze, Regional Treasury Director.
Next was bank access management and their aim was to improve security of the entire banking access via two online banking platforms (online banking platforms).
The result is a standardised process for the Bank Access Management across the key banks and geographies with standardised documentation.
Under the liquidity management stream the company’s aim was to explore surplus liquidity across all markets, open and restricted and either upstream proceeds to group for funding business growth/reducing interest expense at parent level or improve interest income for balances retained within Asia.
China is one of the most crucial markets for Danone globally. The team worked on a dual strategy of offshore cash lending and offshore cash pooling with a view to manage core excess cash as a one-time activity with lending and managing regular operational needs (surplus and deficiency) with a regular pooling solution.
The solution implemented in Oceania was not a traditional zero-balance (ZBA) structure, but rather a cross-border pooling structure from Australia and New Zealand directly to the accounts held in the Netherlands with BMG bank.
“The solution allowed us to upstream around €180m and reduce interest expense significantly. Implementation for HK and UAE is underway and will be complete by the end of 2021,” says Abutidze.
Other projects under this pillar include automation of deposit/MMF reporting in TMS, green deposits in India and a revamped banking strategy in the region.