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Managing Growth by Adding Value

by Michal Kawski, Head of Treasury, Gazprom Marketing & Trading Ltd

Gazprom Marketing & Trading (GM&T) has experienced considerable growth in recent years, necessitating the creation of a new treasury function in 2008. Since then, the new department has actively supported the rapid growth of the group adding to the scale and complexity of treasury’s activities. In this article, Michal Kawski, Head of Treasury, describes some of the ways in which the department has managed business growth over this challenging period, and established a framework to facilitate future expansion.

Treasury environment

Our Global Treasury team was established in July 2008 in London, UK. Before this time, a limited number of treasury tasks were distributed across the company and liquidity management challenges were limited due to standard gas transaction settlement terms. As the scale and diversity of the group’s activities continued to increase, however, senior management recognised the need for a dedicated, specialist treasury function. The timing was very fortunate, as the global financial crisis had a significant impact on GM&T, with substantial volatility in gas prices, so treasury had an immediate job to do in managing the liquidity of exchanged-traded contracts. Cash flow forecasting and working capital management became a priority during a period when bank financing was hardly available for market newcomers.

The crisis emphasised the importance of a strategic treasury function, which has developed considerably since it was first established. Treasury has a broad remit to support group subsidiaries across funding, cash investments, cash, liquidity and working capital management, bank relationships, corporate foreign exchange and interest rate risk management. We also monitor incoming funds, manage margined positions and produce treasury performance reporting.