Following the acquisition of Finnish paper chemicals specialist Raisio Chemicals, Ciba had look at ways to integrate the new company’s cash management solution. It used Deutsche Bank’s single file payment channel to transmit local payments and other requirements.

Problem…

When Ciba bought the Finnish paper chemicals specialist Raisio Chemicals in 2004, Raisio was using several different local banks. Ciba needed to integrate the newly acquired company into their existing Euro pool managed by Deutsche Bank, but there were several obstacles to overcome.

At that time, the systems used by Ciba did not support the integration of local Finnish payments. There were two particular problems:

1. For tax reasons, Raisio was using a specific payment method for Finnish farmers.
2. Composite debit statements were needed in order to ease the reconciliation process.

In order to incorporate Raisio in the company’s cash management solution, Ciba had to upgrade its system capability to process these payment types in the EDIFACT message format.

…Solved

Already using Deutsche Bank’s single window payments infrastucture and its regional liquidity management across Europe, Ciba wanted to integrate Raisio Chemicals into the existing payments and cash concentration agreements. “Acquiring new entities in other countries means that the account landscape needs to be streamlined in order to achieve an integration into the existing pool and a seamless interface to Ciba’s system,” explains Dr Stefan Eggli, Head of Treasury Control at Ciba. “But the good thing is because we work with one partner in Europe there is no discussion about how we will do this. In the case of Raisio Chemicals, we knew exactly what we wanted to have, so that avoided any discussion about which bank we should go with.”

Ciba went to Deutsche Bank and used the bank’s single file payment channel to transmit local payments and other local requirements. “We tried to integrate the payments as an EDIFACT message,” says Eggli. “When we started with the project, Deutsche Bank’s system didn’t support the processing of the very specific local requirements. However, a mutual solution was found in conjunction with Deutsche’s local partner in order to support this payment format for the Nordics.” In conjunction with this, Deutsche Bank also helped Ciba to specify the technical requirements needed to support this internally.

Finally, the domestic Finnish pool had to be integrated into Ciba’s existing Euro pool. Deutsche Bank implemented a sweep trigger balance/cover trigger balance in order to meet the local cash needs, ie transferring or covering when the trigger amounts were reached. They also helped Ciba to meet all legal requirements and provided the appropriate documentation for the integration.

Throughout this process, implementation management and customer service is a key area where Deutsche Bank has stood out for Eggli. “Working with customer support is always difficult. You call their customer support and have to spell your name and the first thing that you get is a ticket number.” This is not the case in Ciba’s experience with Deutsche Bank. “Where they are really good is with their ongoing support. They run a centralised implementation and support centre in Frankfurt. The people working there know Ciba Specialty Chemicals very well – they know about our problems, they know about potential improvements and we’ve been talking to the same key people since we started with the Euro pool.

“Deutsche Bank says it has ‘a passion to perform’. And I think that’s true”.