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Cash & Liquidity Management
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Fluor Corporation Optimises Cash Management in Europe

by Martin Blom, Finance Director, and Arno van Slooten, Manager Accounts Payable, Fluor B.V.

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As a leading global engineering and construction company, Fluor has had a long-standing presence in Europe. The Netherlands office was established in 1946 and acquired by Fluor in 1959. Managing cash and risk is a key treasury responsibility. In cooperation with its US headquarters, the Netherlands treasury group is responsible for over 20 legal entities and branches across mainland Europe. This article outlines Fluor’s successful relationship with partner bank ING, which has resulted in considerable financial and operational efficiencies through a series of transformational initiatives including notional cash pooling and a SWIFT based payments hub.

A partner in business

According to Martin Blom: “We have a large multi-currency credit facility in the United States and typically, we try and offer our ancillary banking business to the banks that participate in this facility wherever possible. As a result of our financing relationship, we evaluated ING’s cash management services in Europe to understand synergies between the organisations. We were very satisfied with the solutions and services that ING offered, and appointed the bank in 2006 for European cash management services. This relationship has progressed very successfully both in terms of day-to-day banking and transformation initiatives that we have undertaken together.

“Our treasury centre in the Netherlands has responsibility for cash and treasury management activities in mainland Europe. We have set up entities in each country in which we operate, each of which needs its own bank account for supplier and employee payments. We use SAP for cash management and accounting and produce batch payments files which are forwarded to ING. We have a local multi-used facility with ING in the Netherlands to allow occasional overdrafts, but primarily to allow ING to provide bank guarantees. Typically we give guarantees to customers for advance payments or performance guarantees. Smaller guarantees (e.g., under €2m) are issued within this facility, although specific credit lines are set up for larger ones, supported with a parent company guarantee.”