Treasury Practice

Problem Solved: Agapito Martínez & Juan Fco. Encinas, Holcim España

Published: Oct 2007

“We were looking for a mechanism that would help us to optimise our collection and payment processes,” explains Agapito Martínez, Chief Financial Officer of Holcim España, and Juan Fco. Encinas, Holcim’s Administration and Treasury Manager.

Agapito Martínez

Chief Financial Officer

Juan Fco. Encinas

Administration and Treasury Manager

Holcim España, S.A., is the head company of a group of companies located in the following Spanish regions: Andalucía, Levante, Galicia and the central region of Spain. Its main activity is the manufacturing, marketing and sale of cement, concrete, aggregate and mortar cement, as well as logistics and valuing waste. Holcim España is part of the multinational Swiss holding group Holcim, which is present in more than 70 countries and is one of the leading companies in this industrial sector.

Problem…

“The objective was to reduce administrative work, such as signing, handling and sending documents, as much as possible without losing any control over the payment process. At the same time we wanted to offer our suppliers a better payment system with better conditions, specifically financial and risk conditions.

Our decision was to outsource these tasks; therefore we searched the market for an expert able to adapt its knowledge to our complexity. We were looking for a global service package able to adapt to our own and our suppliers’ needs.”

…Solved

The solution chosen by Martínez and Encinas was created by Santander Factoring and Confirming S.A. (a 100% subsidiary of Grupo Santander). “Holcim had a strong motivation for selecting SFC,” says Martínez. “Being pioneers in the product gives them an advantage against their competitors. At the same time, we based the decision on our strong banking relationship with SFC and on their wide factoring experience in financing receivables, short-term credit insurance, payments and collections.”

In a written agreement, Martínez and Encinas entrusted SFC with the performance of all Holcim’s administrative tasks relating to suppliers’ payment processes. The solution uses Confirming®, an administrative and financial service that benefits both Holcim and Holcim’s suppliers. The solution improves Holcim’s payment chain management in three main areas, as Martínez and Encinas explain:

“Firstly, from an administrative point of view, we get control over the amounts and maturity dates of our payments. We decide how and when to pay using different payment methods (cheques or electronic transfers). From the moment we send the irrevocable payment order to SFC, we avoid all the workload linked to the payment process, such as printing and signing of bank orders or cheques, packing and postal mail, document reconciliation and lost claims.

Secondly, we have simplified our accounting by negotiating the most suitable way for Holcim to charge our bank account with SFC. Due to our reconciliation needs, we wanted charges to be done invoice by invoice to allow an automatic matching of all our records (although there were other possibilities such as grouping by total amount or reference numbers, supplier, maturity dates, etc). As a consequence of that, our accounting has improved notably.

Thirdly, Confirming® has turned into a very powerful negotiation tool. Through SFC, we can provide our suppliers with a very strong financial product that eliminates a significant number of administrative tasks and reduces the cost of our collection procedures. Suppliers can also request an advanced payment for one or several invoices at any time before maturity date, without the need of a credit line. SFC pays the supplier the advanced payment and Holcim then repays SFC at the maturity date.”

Financing through Confirming® means the assignment of receivables without recourse, as SFC takes on the associated credit risk. This tool also improves the working capital position of Holcim’s suppliers, as suppliers can convert these receivables into cash. The advanced payment does not increase the supplier’s credit exposure so it does not impact on the supplier’s access to finance.

Martínez and Encinas feel that the integration of Confirming® has added significant value to their payment chain management. “We feel fully in control by using the website, through which we can query and operate online. The suppliers can calculate their advance payment and all our information may be downloaded in Microsoft Excel format at a mouse click.” In addition, the support they receive from SFC ensures a smooth service: “Since day one, we and our suppliers have received support from a specialised Confirming® team via their call centre.”

All our content is free, just register below

As we move to a new and improved digital platform all users need to create a new account. This is very simple and should only take a moment.

Already have an account? Sign In

Already a member? Sign In

This website uses cookies and asks your personal data to enhance your browsing experience.