Kalbe’s cross-border payments simplified with Global Disbursements

Kalbe International Pte Ltd (Kalbe) is an international marketing company based in Singapore that mainly handles the international business of Kalbe Farma, Indonesia’s largest publicly listed pharmaceutical company. Kalbe is present in 10 markets globally (Indonesia, Singapore, Cambodia, Malaysia, Myanmar, Philippines, Thailand, Sri Lanka, South Africa and Nigeria), and have dealings in more than 15 additional markets through trade partnerships¹.

The Challenge

The Kalbe Farma Group has grown extensively over the past few years through a number of major acquisitions. Kalbe International was established as part of a move to ensure scalable growth, and greater overall efficiency in transaction processing.

An area identified for optimisation was around cross-border payments to global suppliers, which had grown significantly in volume following the company’s expansion. Conversion of exotic and tertiary currencies (e.g. Indonesian rupiah, Philippine peso, South African rand and United Arab Emirates dirham) also involved multiple processes. For some markets, funds would first be converted and sent from a foreign currency account in Singapore to an onshore foreign currency account in the receiving market – which were mainly held with local banks. Funds would then be converted onshore to the local currency, before being disbursed to the end beneficiary.

Altogether, Kalbe observed inconsistencies in process and settlement times, as well as higher costs from transaction fees, account maintenance and suboptimal FX fees. Complexities in payment reconciliation, a lack of transparency into applied FX rates, and excessive time spent booking and executing FX transactions, further added to Kalbe’s challenges.

The Solution

Kalbe resolved this by implementing HSBC’s Global Disbursements (GD) – a solution that allows Kalbe to pay beneficiaries around the world in over 130 currencies, from one account in Singapore. Through this, Kalbe simply submits one batch payment file that can include multiple currencies which are then automatically processed and disbursed in the receiving currencies through the lowest-cost rails where possible.

This solution provides Kalbe with a single, standardised process for cross-border payments in all currencies, which are disbursed to beneficiaries in their local currencies. This eliminates the need for Kalbe to maintain additional foreign currency accounts in Singapore, and with local banks in the various operating markets. This solution is also scalable to cover additional currencies and markets as needed, without opening additional currency accounts.

The overall approach has enabled Kalbe to centralise global payment processing to their treasury centre in a relatively short amount of time.

• A standardised global process leveraging funding from a single account
• Rationalised accounts held with local banks in restricted markets
• Automated bulk currency conversions to reduce manual FX booking
• Direct, consistent settlements in local currencies
• Improved transparency through a standard report for reconciliation
• Scalability to add currencies and replicate in other markets, depending on business needs

Kalbe International is a Highly Commended Winner of the 2024 Treasury Today Adam Smith Awards Asia in the Best Foreign Exchange Solution category.