Cash & Liquidity Management

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Building for the Future Treasury Technology at A. Schulman Inc. A. Schulman is a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. The company’s principal product lines consist of proprietary and custom-formulated engineered plastic compounds, colour concentrates and additives that improve the appearance and performance of plastics in a number of specialised applications. Headquartered in Akron, Ohio, A. Schulman employs approximately 2,200 employees and has 16 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region. A. Schulman stock is quoted through the Nasdaq National Market System (Symbol: SHLM).

Building for the Future

Treasury Technology at A. Schulman Inc.

by Kurt Loeffler, Treasury Manager, A. Schulman Inc.

A. Schulman is a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. The company’s principal product lines consist of proprietary and custom-formulated engineered plastic compounds, colour concentrates and additives that improve the appearance and performance of plastics in a number of specialised applications. Headquartered in Akron, Ohio, A. Schulman employs approximately 2,200 employees and has 16 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region. A. Schulman stock is quoted through the Nasdaq National Market System (Symbol: SHLM).

Technology Need at A. Schulman

Visibility and Control

A. Schulman’s treasury function is a small, highly focused team with two people at the corporate headquarters in Ohio, two in Belgium, managing the European treasury and cash management requirements, and two people in Mexico, responsible for domestic cash management. Until March 2009, A. Schulman had been using spreadsheets to manage all aspects of its treasury activities globally. However, with an increasing focus on cash visibility across the business, and greater management attention on issues such as liquidity and risk, we recognised that spreadsheets did not provide the level of control which we were seeking over our cash flow, including visibility and auditability.

Banking Requirements

Historically, we have accessed our bank statements on a daily basis by accessing each bank’s proprietary system and downloading the relevant information. While this has not caused any particular issues in the United States, where we have relatively few banking relationships, it is more time-consuming and inefficient in Europe where we work with around 16 banks. To address this, we have been using Isabel, which provides Belgian-based multi-bank ebanking capabilities. However, we needed a new system to integrate with Isabel to allow us to integrate our cash position with our transaction processing.

Internal Connectivity

A. Schulman has a largely decentralised approach to technology and business processes, so data on which treasury relies for forecasting and exposure management is sourced from various places. Trying to combine this information in a consistent way using spreadsheets can pose challenges, so we wanted a new system which could integrate with our ERP applications more easily with less fragmentation of information and scope for error.

Cash Centralisation

We are starting to implement a treasury shared services centre (SSC) in Belgium which includes a cash concentration arrangement with Fortis. This includes setting up an in-house banking operation, requiring more sophisticated transaction management, accounting and internal current account maintenance functionality than a spreadsheet can deliver. In the future, we are intending to extend our cash pooling arrangement to include other countries, particularly as Fortis’ geographic footprint matches those of our European operations such as Central & Eastern Europe and Turkey, so it is important to have the right technology in place to support this.

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