7 min read
Adam Smith Awards Asia 2022 Podcast Highly Commended - Best in Class Global/Regional Treasury Solution
00:00:04 Sarah Rundell, (Treasury Today)
The Adam Smith Awards Asia are recognised as the industry benchmark for best practise and innovation in corporate treasury.
Throughout this dedicated series, we take a deep dive into each of the winning solutions of 2022 in conversation with the creators themselves.
00:00:26 Meg Coates (Treasury Today)
Hello, I'm Meg Coates, Joint Publisher and Head of Operations at the Treasury Today Group.
In this episode, we take a look at the Overall and Highly Commended winners in our Best in Class, Regional or Global Treasury Solution
Another new category, open to any company that implemented a treasury related solution on a regional basis. Perhaps the company manages a region or regions from a regional treasury centre. Perhaps the company has taken it a stage further and combined regional treasury responsibilities across time zones to establish a truly global treasury structure from a single location.
And the Overall Winner of our Best in Class, Regional or Global Treasury Solution is Bridgestone Asia Pacific, Daniel Teo Tiam Guam CFO collects the award alongside their banking partner J.P. Morgan, represented by Minarko Stryer.
00:01:37 Daniel Teo (Bridgestone Asia Pacific)
Hi, my name is Daniel Teo, I'm the Regional CFO for Bridgestone Asia Pacific Private Limited. We have won the award for the Best in Class Solution for Regional and Global Treasury Cash Management Solution.
We set up a multi-entity, multi-currency notional cash pooling system. The objective was related to provide visibility, cash pool all the cash that we have in the different GC and the Centre have yield management for the region as a whole.
I think J.P. Morgan has very strong partnership with us in other parts of the world, and so it's only natural that we selected them to help us as we transform the cash pooling system that we want for the region and given that they know what we are and who we are and what's our priority. So, they were able to provide a very innovative and very effective solution for us.
Additionally, I think with J.P. Morgan's expertise and no one in each of the mark they were able to provide support to us and collaborate closely with us, help us understand what we need to do to set up that multi-currency, multi-entity cash pooling system. So, their support has been really, really important and critical because they have the technical expertise and to guide us along and also to clear each of the country's regulatory environment and requirements, so that has been really helpful for us.
And now it's time for a word from my partner.
00:03:11 Lillian Sim (J.P. Morgan)
I'm Lillian Sim, Managing Director responsible for the corporate business for J.P. Morgan in Asia Pacific.
I think first of all a multiyear treasury transformation is definitely highly complex, and you know especially it involves a company like Bridgestone of scale and size in the region. So, if you look at Bridgestone, what they've done is to assess the best practises, and you know, on leveraging the latest technology and innovation in liquidity management to really think about how they could efficiently pool and extract the cash in the region that serve the purpose for them, and this is really a critical first step towards their transformation journey. So, I think as a banking partner for Bridgestone, it was really important for us to fully understand Bridgestone objectives of this transformation project and it really centres around automation, centralization, optimization as well as governance.
So, as we look at all these objectives and also how Bridgestone operates in this region, where it involves regulated markets like Thailand and China, it was really important for us to ensure that these are in scope in how they look at extracting their cash and how they're managing their liquidity. So, what we did really was to work closely with the Bridgestone team to understand the scope of these regulated markets and ensuring that they will navigate the local regulations and then tailor the solutions accordingly to ensure that we meet their ultimate objective.
So with the success of this solution that we've implemented for Bridgestone, it really allowed us as partners now to continue the dialogue to find different ways to fine tune, to find bespoke solutions to continue to help them to gain even more efficiencies in the region as part of their journey, which as I mentioned is a multiyear journey and we are really, really grateful that we have the opportunity to support Bridgestone in this journey in the region.
00:05:09 Meg Coates (Treasury Today)
Next up the Highly Commended award in this category.
00:05:15 Clara Wong (J.P. Morgan)
I'm Clara Wong, Managing director of Corporate Sales, J.P. Morgan, China. Let me tell you what we did to support our winner. Following their spin off, Garrett Motion was looking to rebuild its cash management infrastructure in Asia Pacific and they came to J.P. Morgan with two objectives in mind.
The first priority was to mobilise the regional cash in APAC to their headquarter treasury in Luxembourg, and the second was to standardise the process across 5 markets that they operate in the region as they look to optimise their treasury. To address their first objective, we helped them implement a comprehensive cash management solution that combines pooling, cross-border sweeps and connectivity mechanism to consolidate their funds from the various APAC markets into a centralised structure and further mobilise to their headquarters in order to improve use of their global liquidity. And at the same time, we introduced the SWIFT net host to host connectivity that not only helps them automate and streamline their end-to-end payments and effects process across their key markets in Asia Pacific, but also improve lender data management and security controls to safeguard their transactions.
Garrett Motion has successfully transformed their original treasury from a heavily manual operation, to a fully automated end to end process just within two months. That was a huge success.
The pooling structure that connects Garrett’s regional liquidity with their headquarters in Luxembourg has provided a cost effective avenue for Garrett to unlock their working capital in Asia Pacific. Even in the restricted markets like China, to mobilise funds to support their global liquidity needs, more importantly, the effort demonstrated by Garrett's team reflects their pursuit to deploy treasury best practise and innovation as they rebuild and strengthened their cash management infrastructure.
00:07:36 Sarah Rundell (Treasury Today)
A huge congratulations to all our Adam Smith Awards Asia 2022 winners.
Thank you for listening to this episode of our dedicated Adam Smith Awards Asia Podcast series, brought to you by the Treasury Today Group.
More episodes will be coming soon, featuring other award-winning solutions, so please subscribe to our channel so you can stay updated wherever you get your podcasts.
Garrett Motion (Garrett) creates technologies and innovations for every kind of automobile, with more than 100 million vehicles worldwide using their products.1 This includes applications for all types of powertrains, from gas to diesel to electric. In 2018, Garrett spun off from American conglomerate Honeywell International, and was looking to rebuild its cash management infrastructure; and specific to Asia Pacific, its regional treasury team in Shanghai had two key priorities.
Garrett’s main priority was to mobilize regional cash to its headquarter treasury (HQ) in Switzerland. While Garrett had established cross-border sweeps to move funds from Japan and Australia to its HQ in 2020, most of its liquidity remained trapped in China, where the company faced strict regulatory requirements governing cross-border movement of funds. Garrett’s footprint across the region meant there was a pressing need for a centralized management of global activity and funding.
Secondarily, the company also wanted to place standardized treasury processes across the five APAC markets in which it operates: Australia, China, India, South Korea and Japan. Garrett’s regional finance teams were using multiple e-banking portals to initiate vendor payments, which created a fragmented and inefficient process. The teams maintained vendor information across disparate portals, which introduced a controls risk because data could potentially be altered.
Garrett turned to new banking provider J.P. Morgan to help the company address these two key treasury priorities.
The cash management infrastructure has delivered increased automation and efficiencies, while helping us unlock and mobilize millions in liquidity to fuel the funding needs at the Group level. It’s truly empowering to see the strategic role that our regional treasury team can play to deliver to the needs of the broader franchise.
J.P. Morgan created a comprehensive cash management solution that combines pooling, sweeping and connectivity mechanisms to seamlessly move funds between Garrett’s entities in China to its HQ pool. This solution complemented existing cross-border sweeps from Japan and Australia, creating a truly seamless global funding structure, sweeping liquidity into the HQ pool.
Working closely with Garrett to navigate China’s intricate cross-border funding regulations, the bank helped obtain regulatory approval for a cross-border sweeps structure under the Shanghai Free Trade Zone scheme that allows Garrett to concentrate its domestic Chinese yuan funds, and subsequently further mobilized to its HQ via cross-border sweeps.
Further, Garrett alleviated its dependence on e-banking portals by adopting SWIFTNet host-to-host connectivity. That allowed the business to streamline its end-to-end bulk transmission of domestic and cross-border payments and FX initiation. Supporting documents were also updated, standardizing Garrett’s payments processes across Australia, China, India, South Korea and Japan.
Garrett successfully embraced best practices and innovations in liquidity and treasury management to rebuild their regional treasury infrastructure in APAC, allowing them to establish a cost-effective avenue to unlock internal working capital and mobilize funds across their global operations in a highly efficient manner
Garrett’s solutions were designed to be highly scalable, which allows the organization to connect with markets and entities as it expands.
With J.P. Morgan’s assistance, Garrett successfully transformed its regional treasury from highly manual to completely automated. At the same time, the treasury processes across the five key markets in APAC have been standardized. Instead of grappling with a fragmented system of local and global banks and file formats, treasury is now equipped with a single pipeline and a single file format, supported by JP Morgan. The company also used SWIFTNet to automate standardized processes and centralized its vendor information, and as a result, eliminated manual initiation and improved security controls to prevent fraud. SWIFTNet is now in place across Garret’s APAC locations, with new markets quickly onboarded via J.P. Morgan’s processes.
The quick turnaround demonstrates the regional treasury team’s quest to deploy treasury best practices, while positioning the region as a strong contributor to meet global funding needs. By connecting Garrett’s regional liquidity with HQ, the firm established a cost-effective avenue to unlock working capital in restricted markets like China, allowing the firm to effectively utilize internal working capital to fund pressing needs as and when needed.
The newly built cash management infrastructure, which combines powerful mechanisms across pooling, sweeping and host-to-host connectivity, has also enabled Garrett to automate processes across domestic and cross-border payments and collections, as well as liquidity management.
To learn more about how we can support your business, please contact your J.P. Morgan representative.
Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. All rights reserved.
The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit jpmorgan.com/paymentsdisclosure for further disclosures and disclaimers related to this content.