- Article
- Financing
- Ensure sufficient cash-flow
Treasury transformation through HSBC’s Global Liquidity Solutions
Holcim is a global leader in innovative and sustainable building solutions, with over 60,000 employees around the world. Headquartered in Zug, Switzerland, the organisation focuses on four core business segments: cement, ready mix concrete, aggregates, and solutions & products.
Holcim required a banking partner to support an ambitious treasury transformation plan with the objective to centralise and optimise the treasury function, including rationalising the banking structure, reviewing cash management activities to deliver straight-through-processing to business operations teams, and gaining full cash visibility.
Decentralised approach lacking in 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.
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.
Holcim performed a Global Treasury transformation in a decentralised environment, and our partnership with HSBC was a key enabler in this project, bringing automation and scalability. Managing such a structure required a superior and powerful digital tool like the Liquidity Management Portal, operating dynamically and in real-time.
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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 operates, 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 is managed by one single person which spans 19 markets in 5 regions, involves more than 170 entities directly or indirectly connected to the pool, 13 currencies, and close to 60 bank accounts.
The success
- Centralised treasury structure
- Increased visibility and control over group liquidity
- Maximised returns on excess funds
- Reduced costs
- Increased efficiency
