Based on an interview with James Adams, Group Treasurer, and Shiban Patel, Treasury Analyst, Chalhoub Group
The benefits of centralised treasury operations – and of in-house banks – are today increasing interest to more and more successful corporations in the Middle East.
- The successful expansion of the Chalhoub Group led the group to decide, about two years ago, to create a centralised group treasury department at corporate head office in Dubai.
- This would take advantage of economies of scale in FX and cash management and provide improved visibility of cash.
- The article offers suggestions and advice to other companies considering such a step, and summarises the benefits which the Chalhoub Group has achieved through treasury centralisation.
Building a group treasury
About two years ago, the Dubai-based Chalhoub Group’s sustained business success and growth caused the CFO and CEO to decide to establish a group treasury department. The primary reasons for doing so were to take advantage of the economies of scale in the management of foreign exchange risk and of cash, and to improve the visibility and mobilisation of cash, in what was a typically decentralised corporate structure.