Treasury Practice

Problem Solved: Piyada Sookaimoath, CPN

Published: Nov 2015

Citi

Central Pattana Public Company Limited (CPN) is Thailand’s largest retail developer with over 30 years of experience. CPN currently manage 28 shopping centres, seven office buildings, two hotels and two residential projects. The company is the leader in the retail development and management sector with the biggest share of Bangkok’s retail market at 20%.

Piyada Sookaimoath

Assistant Vice President, Corporate Finance Division

Problem…

CPN is currently undergoing a period of expansion in its home market of Thailand. The rapid growth, however, exposed a number of shortcomings and friction points across the organisation’s processes. In reaction to this the company has in recent years given a significant amount of attention to improving the overall process efficiency across the group to ensure it can meet both its immediate and future objectives.

A major area of focus for CPN was driving efficiency in the treasury and finance function. As Piyada Sookaimoath, Assistant Vice President, Corporate Finance Division at CPN explains, “Historically the function was very labour intensive. We manually managed nearly all of our processes, especially in liquidity management, whilst also supervising close to 200 accounts. The treasury’s time was therefore spent on these tasks rather than on adding value to the business and assisting with its expansion plans.” These challenges were amplified as the company expanded and its operations became increasingly complex.

…Solved

In order to resolve these issues, the company launched an ambitious project to streamline its bank accounts, automate its payments and receivables where possible and ensure its cash was being used efficiently. To do this, CPN’s treasury drew up a list of requirements to increase overall process efficiency. These included: seamless integration with SAP, producing more efficient reporting and reconciliation, improving end-to-end security and control and providing excellent customer service to businesses.

Citi was selected to fulfil the requirements. CPN’s treasury team felt the solutions offered by Citi and Kasikorn Bank (KBank); Citi’s partner bank, best fit the objectives of the treasury as well as minimising the switching cost for the company and its clients.

For improved liquidity management, the solutions offered by Citi included: a single bank account to enhance visibility and control, a fully automated cash pooling system which eliminated manual processes for cash consolidation and single collection and payment data files and reports. The company was able to reduce its number of bank accounts from close to 200 to only 24, lessening the resource burden associated with managing these. Moreover, as Sookaimoath explains: “A number of cash pooling structures are available without a credit facility. If credit support is needed for other purposes, however, Citi will provide an umbrella facility for the cash pooling, it is very flexible to our needs.”

To streamline the collections process, Citi provided virtual accounts to help identify payers and remove the need to manually track payments. This information is fed through a single collection channel, providing better visibility and access to the data. This can then be analysed through Citi’s Receivables Vision analysis tool which helps the CPN treasury team to more accurately predict its future cash flow. Moreover, since local regulations stipulate that foreign banks are only allowed to set up one branch in Thailand, Citi has worked seamlessly with CPN’s local partner bank, KBank, to support the conglomerate’s local collections nationwide, giving the company the local coverage it requires.

CPN’s payments processes have been streamlined through the use of Citi’s Payment solutions which allows CPN to send a variety of payment types, with multiple value dates, in one single consolidated file via host-to-host connectivity. Moreover, this process has been fully integrated into SAP, providing an automated end-to-end payment process.

Today, 26 local entities and two entities in Malaysia have joined the scheme. Going forward, CPN is aiming to grow three to four property development projects per year in Thailand and expand into other South East Asia markets. It is therefore vital that the solutions are scalable to allow more entities to be on-boarded quickly and efficiently. Citi’s extensive global network will also play a key role in facilitating CPN’s growth overseas.

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