Best Cash Pooling Solution: Holcim

Holcim is a global leader in innovative and sustainable building solutions. The company’s 63,448 people around the world are driven by the company’s purpose to build progress for people and the planet. Headquartered in Zug, Switzerland, the Group focuses on four core business segments: cement, ready mix concrete, aggregates, and Solutions & Products – which includes advanced roofing, insulation and specialty building solutions.

The challenge

Holcim required a banking partner to support an ambitious treasury transformation plan to centralise and optimise the treasury function. This included rationalising the banking structure, reviewing cash management activities to deliver straight-through-processing to business operations teams, and gaining full cash visibility.

Enhancing visibility and control

Holcim recognised the need for enhanced visibility and control over its group liquidity amid challenges posed by its decentralised structure. With local treasury teams managing multiple accounts across various banking partners, inefficiencies in local processes were leading to idle balances and manual foreign exchange (FX) hedging.

The solution

Holcim required a bank to deliver a centralised structure to increase visibility and control over group liquidity, maximise returns on excess funds and reduce costs. This approach aimed to streamline processes, maximise returns on excess funds, and reduce costs, ultimately ensuring better visibility and control over the company’s liquidity.

Best practice and innovation

Global Liquidity Solution

HSBC worked in partnership with Holcim to create a future proof structure centred around a global account platform in the Netherlands, where the multi-currency notional pool (MNCP) is domiciled. The MCNP is connected to three main cash concentration structures handling the repatriation of EUR, USD, and GBP balances to the global pool. Additional operational currencies are also connected to the pool via cash concentration.

Available balances are swept automatically daily from HSBC and third-party bank accounts located in 19 markets where Holcim operate, such as New Zealand, the UAE, the UK, Mexico, or the US, all to the pool based in the Netherlands, including 13 currencies.

Holcim also implemented HSBC’s Liquidity Management Platform (LMP), a digital self-service tool allowing Holcim to access and amend detailed parameters in real-time. Key features leveraged by Holcim include liquidity structure management, control and self-service over cash concentration, intercompany lending and automated sweep arrangements, visualisation of the notional pool structure and the ability to set control limits, position alerts and interest rates.

As a result of the centralised approach and comprehensive administrative tool, the entire structure can be managed by one single person, who has oversight of 19 markets in five regions, the more than 170 entities directly or indirectly connected to the pool, 13 currencies and close to 60 bank accounts.

Key benefits

The success

• Centralised treasury structure
• Increased visibility and control over group liquidity
• Maximised returns on excess funds
• Reduced costs
• Increased efficiency