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Optimising Cash Management in a High Performance Organisation

Matthias Brinkschmidt, Head of Cash Management & Treasury Controlling, Linde AG, Binod Patwari, Head of Finance & Control, South and South East Asia, Linde Gas Asia Pte. Ltd and Peter Langshaw, Global Head of Energy, Power, Chemicals, and Mining Sector, Global Transaction Services, Citi

                        

The chemicals sector has focused heavily on cash management, cost control and increased efficiency since the financial crisis to preserve margins and maximise working capital. Over the past year, the sector has experienced a significant recovery, not least due to growing demand from China and emerging markets. The focus on efficiency, control and effective use of cash has stood the industry in good stead to respond to this increased demand, and has enabled companies to invest in expansion and innovation. Furthermore, companies that have focused most on productivity have seen not only a significant growth in sales, but also a leap in profitability.

In 2008, world leading gases and engineering company Linde started to implement a high performance organisation (HPO) across the business, an integrated concept for sustainable process optimisation and increased productivity. This approach has already had a significant, measurable positive impact on the business, with a substantial increase in both sales and profitability. During 2010, the group achieved sales of EUR €12.87bn, an increase of 14.8%, with a 22.6% growth in net profits, largely due to the HPO initiative. The HPO concept remains pivotal to Linde’s culture across all its business functions, including finance and treasury, and also has a considerable influence on the company’s expectations of its business partners. In 2009, Linde mandated Citi as its cash management banking partner in Asia, a relationship which has since been extended to Europe, based on the bank’s ability to complement and contribute to its HPO ambitions.