“Treasury is dynamic – it’s at the intersection of finance, strategy and risk management,” says Rahul Jagga, Treasury Lead at Nestlé India. “I thrive on the problem-solving aspect, whether it’s optimising liquidity, navigating volatile markets or implementing innovative financial solutions. It’s incredibly rewarding to see the long-term strategies and daily decisions I make yield positive financial results for the organisation.”

For Jagga, these positive results have translated into industry recognition, with Nestlé India named Highly Commended Winner in the Best Funding Solution category at the 2024 Adam Smith Awards Asia.

The winning project, which is a first-of-its-kind cross-border supply chain finance solution, has not only benefited the company and its suppliers, but also paved the way for other corporates to follow a similar approach – an achievement which is all the more impressive, given that Jagga arrived in his first treasury role only a couple of years ago.

Recipe for success

“I began my professional journey with a consultancy firm after qualifying as a Chartered Accountant,” he recalls, adding that at that stage, a career in treasury wasn’t really on his radar. But in 2005, Jagga joined Nestlé as a Senior Financial Reporting Analyst – and over the following two decades, his career path saw him progress through a number of roles within the organisation.

“During my time at Nestlé, I’ve had the opportunity to work in various areas, including positions in Financial Accounting, Management Accounting, the Global Capability Centre (GCC) and Treasury,” says Jagga. “Prior to my current role, I served as the Financial Controller for Nestlé’s GCC in the South Asia region, where I led business planning and transitioned scalable activities from the market to GCC.”

As Financial Controller, Jagga was responsible for leading a cost standardisation project, which involved researching how various costs were captured within the company’s eight GCCs around the world, and standardising practices by creating a standard operating procedure (SOP).

His notable achievements in this role also included an initiative to eliminate manual payments in India. “At the time, there were a lot of payments which were not paid directly into vendors’ accounts – I would say around 30% of the total payments were made via cheque or other manual instruments,” he says.

To address the resulting inefficiencies, Jagga’s team embarked on a project to switch those payments to online transfers, which also involved onboarding vendors and updating their master data in the ERP. Following the project, which included a vendor base of around 5,000 vendors, Jagga says that more than 99% of the relevant payments are now handled online.

Moving into treasury

In February 2022, Jagga moved into his current role as Treasury Head, which includes responsibility for managing treasury strategy for India, Sri Lanka and Bangladesh, guiding a team of around ten people across the three countries. Taking on this role presented something of a challenge, as Jagga had not previously undertaken front-office activities.

“One of the good things about Nestlé is that they are prepared to give people the chance to take on new opportunities,” he observes. “I was able to meet the challenge, and I’m now a fully-fledged treasury person.”

As Jagga explains, the treasury function is designed to ensure efficiency and strategic alignment with business objectives, operating as a linear function focusing on core front office activities. These include managing liquidity, risk, forex hedging, compliance, cash flow management, investments, debt structuring and corporate finance.

“We look after the operations centrally from here, and the team in Sri Lanka and Bangladesh co-ordinate the interactions with the banks and local alignments,” he says. “Additionally, I collaborate closely with the supply chain, business units, market CFOs, Legal & Tax, the Regional Treasury Centre and senior leadership to align treasury strategies with broader business goals.”

Jagga’s responsibilities include managing day-to-day liquidity, with a focus on optimising funding and investments, as well as driving capital structure reviews and developing treasury policies. “I also look after the foreign exchange hedging, which includes keeping track of currency markets and hedging against a benchmark,” he says. “And we look after the finance strategy, which means having a clear plan about how to manage borrowing and investments, as well as funding payouts to shareholders.”

Gaining recognition

In 2024, Nestlé India’s achievements were recognised in Treasury Today Asia’s prestigious awards programme, the Adam Smith Awards Asia. The winning solution was a digital cross-border supply chain finance solution provided by Deutsche Bank, which was the first of its kind in the region. The details of the solution, which took an innovative approach in overcoming regulatory constraints, were outlined in a recent case study.

“Effectively we wanted to provide offshore suppliers with financing at a competitive interest rate, but banks weren’t able to remit the money directly due to local regulatory restrictions,” Jagga explains. “So we developed a three-way flow, whereby we send our file to the DB India office, which is then automatically sent to DB Frankfurt. From there, the vendor receives financing. On the invoice due date, we settle with the local bank, which then settles with DB Frankfurt.”

Alongside the benefits to its ecosystem of suppliers in the form of early payments, Nestlé India has also achieved numerous operational improvements as a result of the project, from cost savings and process efficiencies to a lower need for manual intervention.

As Jagga reflects, recognition for this project has not only raised the treasury team’s profile within the organisation, but also prompted interest from other banks and corporates in the region who are keen to explore implementing similar solutions. He observes, “It’s very satisfying to know that the solution we developed is not only helping our organisation and our vendors, but also other organisations and other vendors as well.”

Other recent initiatives include spearheading an effective finance strategy in order to meet the company’s capital expenditure (capex) needs. “We are on a high capex trajectory, which meant we would need to borrow heavily in order to meet our capex requirements,” says Jagga. “The other option was to defer the payout to shareholders. So we proposed a middle path, which moderated our borrowing and resulting in significant cost savings.”

Qualities of a successful treasury professional

According to Jagga, a successful treasurer needs the right blend of technical expertise, strategic thinking and effective communication. “In particular, this means having strong analytical skills to assess financial risks and opportunities, and the adaptability needed to navigate economic fluctuations and regulatory changes,” he says. “Treasurers also need strategic foresight to align treasury operations with long-term business goals, and an awareness of technology in order to leverage automation and data-driven insights.”

Where soft skills are concerned, Jagga highlights the need for excellent communication skills in order to engage stakeholders and banking partners. In particular, he notes that treasury offers a unique opportunity to collaborate cross-functionally with various departments, which enables treasury professionals to gain insights into business dynamics as well as playing a crucial role in driving business success. At the same time, explaining treasury concepts to people in other departments is an important skill which depends on being able to communicate how treasury priorities fit into the bigger picture for the business as a whole.

“So for example, supply chain personnel might not be aware of the challenges that can arise when building up inventory stock,” says Jagga. “As treasury professionals, we need to be able to explain that building up inventory might give you an advantage – but you have to weigh this against the working capital cost, and how this might feed through into shareholder returns.”

Similarly, when the company is focusing on currency hedging, the business might question the importance of providing timely and accurate forecasts. “We need to explain that if they don’t provide their forecasts on time, this can result in specific costs. If we are able to explain the financial impact and how it affects the business, they can quickly grasp the importance of this task.”

He adds, “Everybody has their own priorities. So when you bring in your own priority, you have to tell them what that means for their area of the business. Once they understand, they are fully supportive to our cause and we are better able to work in a common direction.”

Facing treasury challenges head-on

On another note, Jagga is keenly aware of the myriad risks that might have the potential to disrupt the business. “Currency volatility, interest rate fluctuations and geopolitical uncertainties are always on my radar,” he says. “And managing liquidity efficiently while mitigating currency risks is a constant challenge.”

Industry-specific challenges, meanwhile, include maintaining a clear funding strategy for working capital and capex requirements. As Jagga observes, “Staying ahead requires a proactive approach, leveraging technology and maintaining strong banking relationships.”

Also important is ensuring the accuracy of customer collection forecasting. “This is a challenge across different industries,” says Jagga. “But the particular challenge we have is that we have two types of players to consider. One is the general trade – the ‘mom and pop’ shops that sell our products such as noodles or chocolates. And the other is e-commerce, quick commerce, and key accounts such as big malls, Walmart and Amazon.”

For general trade, Jagga says forecasting collections is not overly challenging, “because we have a mechanism of pulling money out of our customers’ accounts. So we have a fairly high accuracy when it comes to collections from general trade.”

But where the second category is concerned, payments from customers tend to be less standardised, which can lead to forecasting challenges. “When we close our cash position for the day, we build in certain credits that are expected to come in,” Jagga clarifies. “But if they don’t come in, or are larger than expected, we either have to borrow more, or keep money idle. So that’s one of the challenges we have, and we are looking at how we can minimise these inaccuracies and optimise the cash we have available.”

To address these challenges, the company has worked with some of its larger customers to implement tools that provide a real-time feed, interacting directly with Nestlé’s ERP system to provide information about when remittances will be received. “By getting that information at least a day in advance, we can forecast what the collections will be,” Jagga says. “It has really improved the collection forecast accuracy. But we can’t have a customised tool for each and every customer, so we’re concentrating on our top customers.”

Goals in the coming months

More broadly, the Nestlé India team is focusing on simplifying and automating its current processes in order to maximise efficiency and focus on core activities. “This includes enhancing our cash management systems and optimising our working capital strategies,” Jagga notes.

Also on the to-do list for this year are various sustainable finance initiatives which aim to align with the company’s ESG goals and ensure long-term financial resilience. “Sustainability is something that our global organisation is quite committed to,” says Jagga. “So we’re working on a lot of sustainable projects.”

One initiative that was a particular focus in 2024 was a project to finance the firm’s dairy farmers. “As a company, we consume a lot of milk from small farmers in India, which are relatively very small,” he explains. “To give you some perspective, there are 80,000-100,000 farmers that provide us with milk on a daily basis.”

By its nature, the dairy industry tends to have high carbon emissions, “and for small farms the per capita consumption is relatively high. When a farm expands, that per capita consumption goes down.” In collaboration with a bank, Nestlé India has therefore embarked on a project to finance farmers in order to help them mechanise their farms, increase their productivity, and ultimately reduce their per capita greenhouse gas emissions – a project which is already yielding promising results.

Bigger picture

Looking at the treasury profession more broadly, Jagga highlights the significant potential that emerging technology offers when it comes to transforming treasury operations. “AI-driven analytics and machine learning are improving cash flow forecasting and risk management,” he says. “Blockchain and digital currencies could revolutionise cross-border payments, while automation and cloud-based treasury management systems are making processes more efficient.”

Of course, technology is only as useful as the results it can generate – and Jagga emphasises that they key for treasurers is to leverage these advancements to enhance decision-making and reduce operational risks.

Last but not least, Jagga says he enjoys spending time with his family as well as reading, playing badminton and listening to music in order to relax and recharge. “I am a yoga enthusiast, and it helps me to stay physically and mentally balanced,” he adds. “My endeavour is to stay engaged with industry trends through networking and continuous learning, ensuring I remain ahead of treasury and financial developments.”