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Building a World-Class Treasury Function

by Odd-Geir Lyngstad, Vice President Finance & Treasury, Elkem

Elkem has a long and illustrious history as an industrial corporation in Norway. Prior to the company’s acquisition by Norwegian conglomerate Orkla Group in 2005, we had a well-established treasury function, which was then consolidated into Orkla’s Group Treasury function. Over time, the strategic focus of the Orkla Group changed, with less of an emphasis on industrial manufacturing and more on consumer brand products. Consequently, Elkem was divested and acquired by Chinese company China National Bluestar (Bluestar) in 2011.

Elkem was already a sizeable group in its own right before the acquisition, with multiple subsidiaries internationally. Consequently, the group had diverse, complex cash and treasury management requirements including financing, intercompany funding, hedging and cash and liquidity management. It was therefore important that the company developed an independent treasury function quickly following the divestment. In parallel, the acquiring business Bluestar was developing its international profile. As a result, its cash and treasury management needs were becoming more sophisticated, and although the company already had a treasury function in China, it was important for the group to develop an international treasury presence. We have therefore developed Elkem’s new treasury function in a way that anticipates developing its role in co-operation with Bluestar in the future.