Optimising Cash and Liquidity Management in Europe

by Terry Haynes, Director of Treasury, Linamar Corporation

Canadian-headquartered component manufacturer Linamar has grown substantially in recent years, extending its business operations from North America into Europe and Asia. Linamar has a publicly stated objective to become a $10bn company through double digit annual sales growth by continuing to build on its significant growth over recent years. This expansion has led to greater complexity in its cash and treasury management operations. Consequently Linamar’s Group Treasury, based in Canada, is taking a three-tiered approach to enhancing visibility and control over cash, maximising liquidity and optimising investment decision.

Treasury organisation

Although Linamar is not a large corporation compared with many of those featured in the treasury media, the complexity of our cash, treasury and risk management requirements is comparable. Furthermore, smaller organisations are often challenged even further in that they lack the access to resources and technology that larger corporations may enjoy.

Treasury management at Linamar is conducted at a group level, based at our Canadian headquarters. Most of our corporate focus has traditionally been in North America, with 30 of our 40 manufacturing plants located in US, Canada and Mexico. In addition, however, we now have substantial and growing operations in Europe (including France, Germany and Hungary) and in China. In the latter case, local finance managers manage the associated treasury management implications, such as bank account management. In Europe, the scale of our cash management requirements has now reached the stage that we needed to centralise and optimise our liquidity.

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