The Treasurer’s Role in Doubling Growth in Latin America
by Wagner Birochi, Latin America Regional Treasury Manager, Syngenta, with Peter Langshaw, Global Head of Sales for Energy, Power, Chemicals, Metals and Mining, Citi Treasury and Trade Solutions
Companies across a wide range of industries are increasingly recognising Latin America as a growth region with extraordinary potential and upside. Across the region, a burgeoning middle class, a growing consumer economy and an urgent need for basic infrastructure are creating many business opportunities. In addition, the rising demand for commodities and other exports worldwide, and increasing foreign direct investment, are boosting growth.
Latin America brings some unique challenges, however. Companies who are investing and expanding into the region are facing ever-changing regulatory, tax and political conditions, coupled with rising costs.
For these reasons, the opportunities, as well as the risks and costs of doing business in Latin America are often greater than those in other regions, including other Emerging Markets. To support this, treasurers are adapting their treasury models to drive growth, minimise costs and manage risks across the region.
One such company which has successfully managed these risks and costs, while also meeting aggressive growth prospects, is Syngenta. A major player in the agri-business, Syngenta has goals to almost double its business to $25bn by 2020. In fact, the agri-business in Latin America is one example of an industry that has been and is set to double on average every seven years. In this article, Wagner Birochi, Regional Treasury Manager for Latin America, discusses how he is successfully overcoming challenges, supporting strategic growth, and leveraging the synergies to be gained from using an integrated, regional treasury approach.
Supporting business growth in Latin America
Syngenta has traditionally adopted in Latin America a largely decentralised approach to treasury management with each commercial unit managing its own transactional activities, while some basic rules are always followed by local treasuries. While this brought some advantages in that on-the-ground teams brought insights into the local market and could be responsive to fast-growing businesses, there were also some challenges with fragmented, inconsistent information and process flows. Consequently, we made the decision to restructure our cash and treasury activities into a regional model to be more consistent with other parts of the world. This included standardising processes, sharing expertise and experience across countries to facilitate best practices and streamlining information flows.
We have a regional treasury manager in each core region, including Latin America, who represents Group Treasury to ensure that global standards and best practices are adopted wherever possible, and to provide information back to Group Treasury on the needs, constraints and opportunities in the region. For example, Latin America brings particular complexities both in terms of the seasonality of our business, the detail of which can be difficult to appreciate without detailed local knowledge, and the diverse, often challenging regulatory environment.