Headquartered in Philadelphia, USA, FMC Corporation (FMC) is a leading agricultural sciences company that advances farming through innovative and sustainable crop protection technologies. The firm generated revenues of $4.7 billion in 2018 and employs approximately 6,500 employees globally. Its Asia Pacific operations span across 13 markets and contributes to 25 percent of its global revenues.

The Challenge

Prior to November 2018, FMC operated a highly decentralized treasury structure in Asia Pacific with each of its 13 markets managing its own cash balances through multiple local banks. This resulted in:

  • High levels of idle cash that generated low yields on local currency balances.
  • Lack of visibility into the region’s overall cash levels as balances across multiple local banks had to be manually collated.
  • High funding and FX conversion costs as the firm needed to make frequent internal fund transfers between markets to support local working capital needs.

The company’s volume of idle cash was highest in China where it held long positions in Chinese yuan (CNY). However, utilizing the excess liquidity in China to fund other markets proved challenging due to the country’s foreign exchange controls on cross-border fund movement.

FMC sought a flexible regional liquidity solution that would allow the firm to efficiently manage surplus balances across its key Asia Pacific markets, especially China, and minimize FX and funding costs. Since it already had an existing structure in China with its incumbent bank that linked all its Chinese entities to a domestic header account, FMC desired a regional liquidity solution that does not disrupt its existing banking setup in China.

The J.P. Morgan Solution

With J.P. Morgan’s help, FMC implemented a single-entity, multi-currency notional pool (SEMCNP) in Singapore to centralize its liquidity across key markets including Australia, China, Hong Kong SAR, Japan, Singapore and New Zealand, and notionally offsetting short positions in one market with long positions in another without the physical conversion of currencies. This allows excess balances across the region to be automatically pooled and made available for entities to self-fund one another in the form of working capital or invested to maximize yields. Any further surplus can also be used to fund working capital shortfalls or pay off short-term debts for their operations in EMEA and the Americas as required.

Integrating FMC's China account into the notional pool was critical and the firm, together with J.P. Morgan, held extensive discussions over two months with China's central bank and was eventually granted exceptional approval to set up a special structure connected to FMC's offshore entities in Singapore and Hong Kong SAR. Twice a day, the unique structure automatically sweeps surplus CNY funds from the China entity into the offshore accounts which is then moved into the SEMCNP. Balances from its other domestic cash pool (with its incumbent bank) are also funded to FMC’s China account under J.P. Morgan and further swept to the SEMCNP.

In the first nine months since the SEMCNP went live, FMC successfully mobilized over $100 million in liquidity, including unlocking trapped cash in its China operations. The solution is also expected to deliver $500,000 in cost savings annually in the form of reduced intercompany funding and FX costs.

The Result

The flexible liquidity solution has enhanced FMC’s liquidity optimization to drive new efficiencies including:

  • Over $500,000 in estimated cost savings annually via self-funding of working capital via the SEMCNP structure.
  • Increased mobilization of trapped cash out of heavily restricted markets such as China via cross-border sweeps into the regional notional pool.
  • Improved yields on overall regional cash balances via enriched investment options.
  • Rationalized the number of banking providers by closing out local bank accounts and utilizing the in-country accounts under the notional pool for operational purposes.
  • Decreased working capital costs by utilizing surplus cash in the regional cash pool to fund local market needs.
  • Reduced FX costs as all positions within the liquidity structure are notionally offset without actual FX conversions.
  • Improved visibility with the ability to track cash balances and intercompany positions in real-time.

J.P. Morgan’s tailored solution has significantly enhanced our liquidity and working capital management in the region; enabling us to mobilize trapped cash out of China to fund other markets while fully complying with local regulations.

FMC Corporation is an overall winner of the Treasury Today 2019 Adam Smith Awards Asia in the category of Best in Class Treasury Solution in China.

To learn more, please contact your J.P. Morgan representative.

Managing Liquidity in a Challenging Environment

In times of economic stress, maintaining robust access to liquidity is a top priority. Here we explore some of the key liquidity challenges on the horizon, how companies can leverage the benefits of cash management centralization through multicurrency pooling and other innovations.

Read Managing Liquidity in a Challenging Environment

New Funding Mechanism Fuels Growth for JERA Global Markets

A changing business landscape calls for best-in-class cash management solutions. The final liquidity management construct effectively provides JERAGM’s treasury a one-stop cash visibility of all participating entities’ accounts and balances. The Asia pool fully optimizes its group available cash for payments during Asia operating hours before sweeping over the Europe pool in Luxembourg in support of European time zones, before sweeping the funds back into Asia. This bespoke liquidity solution is global and fully automated, enabling JERAGM’s participating entities to fully optimize its group available funds, ensures payment funding efficiencies and drives improved cash utilization within JERAGM’s group of companies.

Read How New Funding Mechanism Fuels Growth for JERA Global Markets


This material was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating a possible transaction(s) and does not carry any right of disclosure to any other party. This material is for discussion purposes only and is incomplete without reference to the other briefings provided by JPMorgan. Neither this material nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan.

J.P. Morgan, JPMorgan, JPMorgan Chase and Chase are marketing names for certain businesses of JPMorgan Chase & Co. and its subsidiaries worldwide (collectively, “JPMC”). Products or services may be marketed and/or provided by commercial banks such as JPMorgan Chase Bank, N.A., securities or other non-banking affiliates or other JPMC entities, and such affiliate or entity may or may not be the JPMC entity operating and regulated in your jurisdiction locally. JPMC contact persons may be employees or officers of any of the foregoing entities and the terms “J.P. Morgan”, “JPMorgan”, “JPMorgan Chase” and “Chase” if and as used herein include as applicable all such employees or officers and/or entities irrespective of marketing name(s) used. Nothing in this material is a solicitation by JPMC of any product or service which would be unlawful under applicable laws or regulations.

Investments or strategies discussed herein may not be suitable for all investors. Neither JPMorgan nor any of its directors, officers, employees or agents shall incur in any responsibility or liability whatsoever to the Company or any other party with respect to the contents of any matters referred herein, or discussed as a result of, this material. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice or investment recommendations. Please consult your own tax, legal, accounting or investment advisor concerning such matters.

Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by JPMC and or its affiliates/subsidiaries. This material does not constitute a commitment by any JPMC entity to extend or arrange credit or to provide any other products or services and JPMorgan reserves the right to withdraw at any time. All services are subject to applicable laws, regulations, and applicable approvals and notifications. The Company should examine the specific restrictions and limitations under the laws of its own jurisdiction that may be applicable to the Company due to its nature or to the products and services referred herein.

Notwithstanding anything to the contrary, the statements in this material are not intended to be legally binding. Any products, services, terms or other matters described herein (other than in respect of confidentiality) are subject to the terms of separate legally binding documentation and/or are subject to change without notice.

Changes to Interbank Offered Rates (IBORs) and other benchmark rates: Certain interest rate benchmarks are, or may in the future become, subject to ongoing international, national and other regulatory guidance, reform and proposals for reform.  For more information, please consult: https://www.jpmorgan.com/global/disclosures/interbank_offered_rates.

JPMorgan Chase Bank, N.A. Member FDIC. JPMorgan Chase Bank, N.A., organized under the laws of U.S.A. with limited liability.