Cash & Liquidity Management

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Centralising Liquidity with UniCredit by Silvano Riboni, Corporate Treasurer, Mapei Group; Elisabeth Sprotti, International Cash Management Sales, UniCredit; Jens Kleinwachter, UniCredit Bank Russia A vital element of the services UniCredit provides their corporate customers is the ability to centralise liquidity, enhancing visibility and control over cash flow and enabling treasurers to manage their cash according to the global needs of the business. In the case study that follows, Mr Silvano Riboni, Corporate Treasurer of Italian firm Mapei Group gives an insight on how his company has worked with UniCredit in practise and some of the advantages that the relationship with UniCredit has brought to the business.

Centralising Liquidity with UniCredit

by Silvano Riboni, Corporate Treasurer, Mapei Group, Elisabetta Sprotti, International Cash Management Sales, UniCredit, Jens Kleinwächter, UniCredit Bank Russia

The UniCredit Group is one of the leading financial groups in Europe, with a strong presence in 22 European countries and a depth of capability across Eastern Europe and Central Asia, totalling 49 countries globally. UniCredit is now amongst the top 10 of European banking groups by market capitalisation and top 12 globally. UniCredit Group has garnered a remarkable reputation as a provider of cash management and eBanking solutions, focusing on the individual approach to the customers’ requirements. The Group has a first mover advantage in the European market and Cash Management and eBanking constitute two of the core business activities.

A vital element of the services UniCredit provides their corporate customers is the ability to centralise liquidity, enhancing visibility and control over cash flow and enabling treasurers to manage their cash according to the global needs of the business. In the case study that follows, Mr Silvano Riboni, Corporate Treasurer of Italian firm Mapei Group gives an insight on how his company has worked with UniCredit in practise and some of the advantages that the relationship with UniCredit has brought to the business.

Cash Concentration at Mapei

Silvano Riboni, Corporate Treasurer, Mapei Group
Mapei was founded in 1937 in Milan and has since become the world’s largest manufacturer of adhesives for the construction industry. The company has pursued a global strategy with manufacturing facilities around the world to cater for the needs for its customers in all regions and reduce transport costs. The group now consists of 51 companies including 47 production facilities, across 5 continents and 23 countries.

Cash Management Centralisation

At Mapei, we have a small, focused treasury department of two people. Until quite recently, the group’s financial activities, including bank relationships, were decentralised, with each business unit managing its own cash. An important objective in recent years has been to centralise the group’s financial activities to create better economies of scale and create visibility and control over group cash. This is not an easy objective to achieve when business units have had a long history of managing their cash independently. However, by working closely with each subsidiary, and seeking management support to sponsor the project, we have achieved a high degree of co-operation and support for the project globally.

The first step to achieving our centralisation objective was to rationalise our banking relationships, replacing the local banks in each country with a small number of group banks. We started working with ABN AMRO, now RBS, but as we needed significant geographic coverage in regions such as Central and Eastern Europe (CEE) we then introduced UniCredit based on the group strategic presence in the regions in which we do business and the long standing relationship between Mapei and UniCredit in Italy. Although our original intention when working with UniCredit was to support our business requirements in CEE but we have since extended the relationship to include other countries.

Cash Concentration

Having streamlined our banking relationships, the next step was to concentrate our cash flow to allow greater visibility and access to cash. In CEE, we started with countries in which we already had accounts with UniCredit, including Hungary and Poland, and then extended to additional countries such as Germany and Italy. Austria will follow shortly. In each country, we have defined common conditions for both domestic and cross-border EUR pooling in order to maintain consistency across the group. As examples, in Hungary, we have set up a cross border zero balancing arrangement which we launched in July 2008. Poland followed in October 2008 with a domestic cash pool, and in Germany, we have set up both domestic and cross-border pooling which went live in December 2008.

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