by Valérie Sainsaulieu, Head of Treasury Control and Administration - Project Manager, Lafarge
Corporate Treasury at Lafarge acts as an in-house bank to the Group and implements centralisation of the key treasury functions (cash management, financing and financial risk management) as far as possible. The Corporate Treasury team consists of 20 people split between Paris and Brussels. In addition, there is a treasury function in all of the significant business units (BUs), whose treasurers have a strong functional link with corporate treasury.
Corporate Treasury acts as the centre of expertise for the group, publishing policy, guidelines and financial best practices. It assists and supports BUs for all treasury related issues where appropriate. All major external financing is carried out by Lafarge SA, which then provides intercompany financing to group companies as needed. Other external financing to access local currencies and/or local lenders can be made directly at BU level with mandatory and strong support from Corporate Treasury. Cash management is conducted centrally when feasible, with dedicated cash pools in France, UK, US and Canada and also a pan-European, multi-currency cash pool for most other European countries. In total, we work with around 10 cash management banks, with some 200 accounts. There is currently no daily cash centralisation in Asia, Africa Middle East or South America. In these environments Corporate Treasury manages cash recycling and short- to medium-term financing based on a monthly net debt report. Treasury is also the primary counterparty for business units’ hedging requirements. We combine exposures across the business and conduct external hedging transactions, and then perform back-to-back intercompany hedges.
The decision for SWIFT
From a technology perspective, we used to have local treasury systems in most of our business units that are linked with local banks and support the relevant domestic formats. While this arrangement satisfied our requirements, it was resource-intensive to maintain different systems and formats. We therefore launched a project in 2007 to select and implement a standard cash and treasury management system across the group, and as part of this project, we made the decision to implement SWIFT connectivity.