Indeed, Li-Tuomela believes that working for just one company has benefited her career and her ability to add value as a treasurer. “The modern treasurer must intimately understand the business and its strategic direction, targets and values,” Li-Tuomela explains. “You also need to understand the industry, which cannot be achieved overnight. Having worked at Stora Enso for almost 20 years I understand the business quite well – and this helps greatly when I run projects and drive change within the organisation.”
Of course, a successful treasurer also requires first-rate treasury skills. Li-Tuomela honed her craft working under the Group Treasurer in Stora Enso’s Helsinki headquarters for five years. During this time, she worked on the day-to-day running of the treasury, as well as playing a key role in several large transactions and transformational projects.
“The more I worked in the treasury department, the more fascinating I found it,” she says. “As the internal bank of a large corporation, you really get to experience the power of capital.”
In 2013, Li-Tuomela took the career opportunity of a lifetime to set up a new project treasury office with full-scale treasury operations for the company’s new mill in China. The €800m project in the Guangxi Beihai region’s Tieshangang industrial zone is the largest Nordic direct investment in China and a significant investment for Stora Enso.
One of Li-Tuomela’s key responsibilities as Project Treasurer was to ensure that there was enough funding at a reasonable cost to finance the construction phase of the project. To say this was a challenge is an understatement, especially given the size of the investment required. Li-Tuomela notes it taught her about the importance of a balanced funding portfolio when operating in China.
“The Chinese banks have huge balance sheets and deposits, which make them the most competitive CNY lenders,” she explains. “The international banks, on the other hand, are more reliable – but their lending ability can be hampered by the regulators. It is, therefore, crucial to diversify risks and use a variety of lenders when operating in China.”
Aside from ensuring the project was funded, Li-Tuomela also put in place all the elements required in any treasury department. This included bank connectivity, payment processes and risk management systems. “This was incredibly hands-on but very exciting as I had my own sandbox and the ability to shape the treasury in my vision,” she says.
Three years on, the mill is up and running and a huge success for the company, “It was one of the highlights of my career and it was a privileged to work on the project,” she says.
With the Guangxi Mill completed in 2016, Li-Tuomela was at a crossroads in her career, looking for a role that could provide her with the same professional fulfilment as the project she had just worked on. Thankfully, Stora Enso’s growth in China meant that she didn’t have to wait long and was soon tasked with another exciting project: building a centralised regional treasury department in Shanghai.
This was to be a stimulating challenge because most of Stora Enso’s operations in China are carried about by joint ventures. “The level of treasury being conducted by these joint ventures was basic,” says Li-Tuomela. “For example, some operating units didn’t do cash flow planning and few had controls or standardised processes in place. Some didn’t even have account payables ledgers, meaning they had little idea how much cash they had, or needed.”
To rectify this, Li-Tuomela set to work on several transformational projects. The most important of these was the formation of an RMB cash pool to centralise liquidity and enable treasury to act as an in-house bank for the business units.
With the cash pool in place, Li-Tuomela and her team then spent significant time analysing cash flow patterns to increase the accuracy of the cash flow forecast and facilitate better liquidity planning. “There is always room for improvement in this area, but I think we have done a great job,” she says. “We now have one of the most sophisticated treasury operations in China.”
Despite her success centralising the treasury operations, Li-Tuomela admits that it has been a challenging process, testing her change management skills as much as treasury abilities. “Convincing the business units to give up their power and decision-making ability to a treasury department they didn’t know was not an easy process,” says Li-Tuomela. “It required lots of conversations and reassurances that this would be a positive step. Eventually, we were able to convince them that this was a positive change that would enable them to focus on their core competencies and better meet their KPIs.”
Today, Li-Tuomela is focused on adding value to the organisation. This aligns with her view that the modern treasury department must be more than an operational centre; it must also help drive the strategic objectives of the organisation. Li-Tuomela provides many examples of where treasury has added-value and influenced the strategic direction of the organisation. One that stands out is her work around credit management and controlling counterparty risk.
This is easily an area fraught with difficulty due to the differing KPIs of the treasury and sales departments, which, as Li-Tuomela explains, “creates a natural conflict”. “Selling as much as possible is rightly the main objective of the sales team,” says Li-Tuomela. “Sales tends to offer longer payment terms and bigger credit limit than what the company’s credit profile allows.”