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2009 –2010Global Transaction Services for Corporate and Public SectorsClient CasebookClient Casebook 2009-2010CollaborateInnovateGlobal Transaction Services
“This Client Casebookstands as a testament to thepossibilities of partnership.”Michael GuralnickGlobal Head of Client Sales Management, Treasury and Trade Solutions
welcomeIt gives me great pleasure to presenttoday, but to set new benchmarks forthe 2009-2010 edition of Citi’s Globalexcellence in treasury and workingTransaction Services Client Casebookcapital management.for Corporate and Public Sector clients.Michael GuralnickManaging DirectorGlobal HeadClient Sales ManagementCorporate and Public SectorsThis compilation of over 60 clientDuring the past year we have allcase studies gathered from acrossbeen presented with challengesthe globe is a testimony to theacross our businesses andinnovative spirit of our clients. Whenindustries. Against the backdrop offaced with substantial market andeconomic uncertainty, capitaleconomic headwinds they werepreservation, risk mitigation anddetermined to raise the bar onbottom-line performance haveproductivity and operating efficiencybecome overarching imperativesand, more importantly, readyto ensure competitiveness.themselves with enterprise-wideThroughout this period we continuedto focus our investments ontools and capabilities to prepare forrenewed growth as markets recover.innovation to deliver to our clientsI hope that you will find the ideas andthe latest working capital andexperiences conveyed by our clientstreasury management solutions toin this year’s Casebook insightful andensure supply chain stability.compelling. We remain steadfast inTimes of adversity and economicuncertainty demand bold responses,and we have witnessed our clients’resolve, determination and creativityto not only meet the challenges ofour commitment to enabling yourcontinued success, and all of us at CitiGlobal Transaction Services welcomethe opportunity to explore furtherpossibilities of partnership with you.
forewordPaul SimpsonManaging DirectorGlobal HeadTreasury and Trade SolutionsGlobal Transaction ServicesThe dramatic change in the economicclients around the world. We are anlandscape over the last 12 months hasinformed provider of knowledge andhad a profound impact on our clients’analytics to better manage keypriorities and their management ofoperating processes and risk. We are aworking capital. Liquidity and fundingreliable source of regulatory and markethave been elevated as critical items onexpertise in a rapidly changing operatingthe boardroom agenda. Supply chainenvironment. And we are a facilitator ofstability is an important considerationcollaborative innovation with our clientsfor many. And there are newand other market participants. We havedimensions to managing risk as thebecome an embedded enabler andfinancial crisis and global recessiontrusted partner to our clients, deliveringimpact all sectors of commerce.interoperable solutions thatIn this difficult operating environment,our clients are turning to us to helpthem creatively and flexibly addressserve a more holistic, multi-bank,multi-functional purpose than anyother provider in the marketplace.their cash processing, financing andCiti is unique in the range of capabilitiesrisk management challenges. Fromand solutions that we offer, and ourstrategic cost management tobreadth of participation across emergingfacilitating enterprise-wide visibilityand OECD markets. We are able toand control across legal entities andleverage our integrated platforms,bank relationships, optimizing liquidityknowledge and experience from acrosseven in highly regulated markets, andthe business, like no other financialbalancing working capital optimizationinstitution, to benefit our clients.with supply chain financing to ensurecontinuity of production.We are living through unprecedentedtimes in our lifetime, and we intendToday, we are much more than a cashto continue serving you, our clients,management service providerwith best-in-class transactionintermediating financial, commercial andservices through and beyond thiscapital market flows on behalf of ourperiod of market volatility.
contentsaccelerating cash inflow (receivables)risk mitigation and supply chain optimization (trade solutions)Nigerian Bottling CompanyEMEATwo-part solution delivers secure and transparent receivables collection10Bamburi CementEMEASupplier finance program safeguards supply chain and optimizes working capital 86MobitelASIAAmbitious collection and payment structure revolutionizescash management12Bosch-Siemens Hausgeraete TurkeyEMEAWeb-based supplier finance platform supports working capital goals92Rain CII Carbon (India)ASIAInnovative receivables financing solution96Reliance IndustriesASIAReceivables finance mitigate risks, increases working capital, and diversifies funding98América MóvilLATAMA USD1.5 billion equipment financing solution100EletrobrásLATAMA USD600 million A/B loan for capital expenditures106Dubai Electricity and Water Authority EMEAExport Credit Agency-backed deal solves financing challenge110BraskemExport Prepayment facility a success despite difficult market conditions116Cargo Network SerivcesNALeveraging technology to improve collection efficiency18Hindustan Coca-Cola BeveragesASIAVirtual accounts facilitate electronic funds transfer and auto-reconciliation22PertaminaASIAOnline payment with greater speed, security, and efficiencyfor customer transaction management28Reliance CommunicationsASIAElectronic receivables management acts as sales enabler32Anvil MiningASIAStreamlined approach to cash management meets ambitiouscost-cutting objectives36achieving visibility and optimization (liquidity and investments)LATAMdriving operational efficiencyMACHEMEATreasuryVision provides predictability to cash-flow forecasting40SiemensLATAMLocal knowledge and technical flexibility deliver integrated solution120Tata CommunicationsASIATreasuryVision facilitates improved strategic decision-making44AmgenNAHarnessing technology to improve treasury efficiency124Novartis ChinaASIACash pooling and overdrafts make a winning combination48Grupo CarvajalLATAMCentralized treasury structure delivers visibility and control128TAQAEMEAAppointing a single global banking partner improves liquidity management52JabilASIAEffective integration of China into a new ERP system132SABMillerEMEAMulti-currency cash concentration strategy delivers considerable cost savings56MichelinEMEA134LenovoASIAIntegrating global payments for simplicity and efficiency58Unique payment and liquidity solution for Western Europe generatesimproved efficiencyGrundfosASIAInterest optimization structure unlocks trapped liquidity60SAP AsiaASIACentralized operations enable efficient integration of new businesses138Turkish AirlinesEMEATarget-balancing structure provides visibility and cost benefits64Sky TVLATAMLeveraging the advantages of a single, integrated treasury solution142Honeywell ChinaASIAThree-tier automated zero-balancing cash pool is a first for China66Minor GroupASIA144Voith Paper ChinaASIAYield benefits convince cash-rich entities to join cash pool68Overcoming organisational complexity to deliver best-in-classprocessing efficiencyNabors IndustriesStreamlining investment and compliance reporting with Treasury Analytics72PfizerGLOBALNACollaborative innovation drives SSC effectiveness148InterContinentalEMEAStreamlining short-term investments for the global hotel group76EMC CorporationNAIncreasing the efficiency and flexibility of global funds investments78
contentsimproving cash outflow (payments)delivering efficiency to the public sectorHotelbeds SpainEMEAIntegrated payment and liquidity solution delivers control and efficiency154Norbulk ShippingEMEAPayment solution frees up company to focus on adding value156Microsoft Asia PacificASIAStandardized and centralized payment processes across Asia Pacific160DKV GlobalityEMEACreating a global payment solution with WorldLink164KLMEMEASSC fast-tracks efficiency gains from SEPA166Cytec IndustriesNAOptimizing payment channels to leverage financial advantages172AstraZenecaASIAA corporate card programme for Asia Pacific174KitchenAid USANAThe perfect blend of consumer incentives178Mando Brand AssuranceEMEACiti Prepaid Cards offers turnkey solution for reward scheme180Men’s WearhouseNAPrepaid card solves payroll delays and improves efficiencyToyota USANACiti Prepaid revolutionizes sales incentive paymentsCaisse Centrale des MutualitéSociale Agricole (CCMSA)EMEAWorldLink streamlines cross-border social payments216Indonesia CustomsASIALeveraging bank technology for customs processing efficiency218Municipal Corporationof Greater Mumbai (MCGM)ASIANetBanking Payment Gateway facilitates integrated vendortender platform222The Against Malaria FoundationEMEACiti supports charity with free global accounts224Rajdhani Unnayan Kartipakha (Rajuk) ASIATechnology unlocks new efficiencies for collections in Dhaka226State of West Virginia StateAuditor’s OfficeNAPurchasing card solution establishes progressive payment program232EMEAPrepaid card program eliminates cash and enhances user experience236184International Organisationfor Migration UK188State of MarylandNAEnhancing benefits for beneficiaries240London Borough of LewishamEMEAPrepaid cards deliver savings and improved user experience246enabling effective interaction with capital marketspartnering for productivity with our clientsCompanhia Nacional deAçúcar e Álcool (CNAA)LATAM Collateral and depositary services facilitate project finance deal194Sapa GroupEMEARapid implementation of commercial card program lays thefoundation for future expansion250MAPFREEMEA198Western UnionNAImplementation excellence delivers centralized, automated payments254Peru LNGLATAM Award-winning landmark export finance transaction202MonsantoGLOBAL Customized online employee training for CitiDirect Online Banking256China Petroleum & ChemicalCorporation (Sinopec)ASIAThriving ADR program supports international expansion208ACE European GroupEMEA258Taiwan SemiconductorManufacturing CompanyASIALandmark ADR program achieves recognition locally and abroad210Execution expertise accelerates merger closingClient Technology Services identifies ways to optimize value
accelerating8 cash inflowCollections, Increasing Cash Velocity,Straight-Through-ReconciliationUnlocking pockets of trapped cash through process efficiencies across theorder-to-cash cycle is fundamental to optimizing working capital. At Citi,we help to streamline collection processes, enhance visibility across theorder-to-cash cycle and identify efficiencies to automate cash and extractadditional liquidity from the entire supply chain.
The challengeNBC, a subsidiary of Coca-Cola10Hellenic, the producer and distributorof Coca-Cola beverages worldwide,has a vast network of distributorsacross Nigeria. NBC wanted aconvenient, reliable, and secure wayof collecting receivables from itscustomers, and an efficient methodof managing its accounts receivables.Nigerian Bottling Company (NBC)NBC wanted to receive credit fromdistributors immediately and theability to view distributors’ paymentsin real time. The company requiredTwo-part solution delivers secure and transparent receivables collectionreliable web-based access to detailedaccount information for control andreconciliation. NBC also neededNBC is the market-leading soft drinks manufacturer in Nigeria. It has 13bottling facilities and over 80 distribution warehouses located across Nigeria.real-time notification for creditsmade into its accounts.The solutionCiti created two integratedsolutions — determined by the sizeof distributors — to meet NBC’srequirement to eliminate cashpayments and give it an effectiveaccounts receivables process.For large distributors, a mobilepoint-of-sale (POS) terminalsupported by Interswitch wasproposed. This solution offered thesame certainty as cash payments,with sales reflected in NBC’soperating account immediatelyfollowing a transaction between asalesperson and merchant.For around 150 smaller merchantswho do not have the volume ofbusiness to warrant the POSterminal-based system, an innovativealternative was proposed. Workingwith three correspondent banks,which have over 600 branchesnationwide, smaller merchants wereissued with checks that were prefilled with NBC’s payment details.These were collected by NBC’sdeliveryman. This solution gaveNBC the payment security it neededbecause checks could not be issuedon accounts with insufficient funds.Moreover, by using a book transferbetween the correspondent banksand Citi, NBC received the value ofchecks on a same-day basis.The resultThe mobile POS terminal solution forlarger distributors designated keyaccount buyers was implementedin 2008. The solution for smallermerchants using correspondent banksand checks is being progressivelyrolled out with the ultimate objective ofcompleting the implementation acrossNBC’s 13 plants in Nigeria, each of whichmanages a local dealer network.NBC has gained the visibility of itspayments and balances throughCiti’s two-part solution. Through Citi’spartnership with local banks, manysmall merchants – previously amongNigeria’s 40 million unbanked people– now have the ability to makelow-value payments.
12MobitelAmbitious collection and payment structure revolutionizescash managementThe challengeThe solutionIn 2008, Mobitel began a five-yearCiti proposed a fully-integratedplan to expand its market shareaccounts receivables and payablesin the Sri Lankan mobile telecomsolution to increase Mobitel’smarket. The company recognizedvisibility and control of funds andthat in order to meet its salesimprove reconciliation. Every aspectgoals, it needed to rationalize itsof Mobitel’s receivables structure wascash management and improve theredesigned. Daily collections of cashvisibility of its funds. To achieveand checks from Mobitel’s collectionthis, Mobitel wanted to centralize itscenters were outsourced to a singleaccounts receivables and payablesthird-party entity, which used anwith a single cash management bankarmed pick-up courier, reducing costsin order to improve its cash cycle andand minimizing risk. Funds weremaximize working capital.then pooled into a concentrationSpecifically, Mobitel neededa collections solution thatdistinguished between paymentsfrom its own 79 collection andMobitel is Sri Lanka’s second-largest and fastest-growing mobile telephoneprovider, with a market share of 25%.service points across Sri Lanka andaccount structure. This gave Mobitelinsight into its cash generation andcollection in different geographicalareas and facilitated informedpayment and investment decisions.those of its franchisees. Moreover,Payments that had previously beenthe company needed to be able tocarried out manually in-house wereuse funds and information obtainedautomated as part of the integratedon the day of collection and sweepsolution using CitiDirect Onlinefunds automatically between accounts.Banking. CitiDirect facilitated multipleIn addition, the company wanted topayment types and offered onlineenhance its management reportingand offline authorization, providingand integrate the solution with its ERPflexibility for signatories. Moresystem for automatic reconciliation.generally, CitiDirect allowed Mobitel tosee real-time collections and paymentsand receive regular, customizedreports online. Mobitel now receivesnotification of large credits and debitsto ensure float maximization. Bothcollections and payments are fullyintegrated into Mobitel’s ERP systemfor auto-reconciliation.Citi’s accounts receivables andpayables solution for Mobitel containedtwo innovations in the Sri Lankanmarket. As part of the receivablessolution, Citi deployed an Easy PayKiosk Machine at Mobitel’s flagshipstore to provide a convenient paymentalternative to its customers. Themachine is capable of accepting cash,check, and credit card payments, andhas instructions in three languageswith voice guidance. It is the first of itstype to be connected in real-time toMobitel’s server in Sri Lanka.A special feature of the accountspayable solution proposed by Citi wasthe outsourcing of Mobitel’s withholdingtax (WHT) certificate issuance. In SriLanka, payments for services are 4
14liable for WHT. Part of every paymentAs a result of Citi’s collection andis returned to the payer along with apayments solution and its WHTcertificate to prove payment. Thecertificate outsourcing, Mobitel hassupplier uses the certificate to offsetsignificantly improved the visibilityits tax bill. Traditionally, this processand control of its payments andhas been manual, time-consuming, andcollections. By streamlining itsproblematic for reconciliation. Citi’send-to-end collections, Mobitel cansolution to this challenge was to issuemaximize its days payable cyclecorporate checks on Mobitel’s behalfand working capital needs whileand print WHT certificates fromenhancing its returns on surplusCitiDirect in a single process. Checkscash. Moreover, by fully integratingcould then be returned automaticallycollection, payments, and WHTto beneficiaries or Mobitel, accordingcertificate issuance, the companyto the delivery instructions. Mobitelrequires fewer resources forwas the first corporate in Sri Lanka toreconciliation, freeing-up staff foroutsource the issuance of WHTvalue-added activities.certificates together with the relatedpayments to a bank. Inland Revenueapproval was required for thislandmark outsourcing.The result“Citi’s solution to Mobitel is basedon their complete understanding ofour requirements and goals,” saysNishantha Weerakoon, Senior GeneralManager in Finance and Procurementat Mobitel. “The Citi team was able toCiti began the implementation ofstructure a solution that truly enhancesMobitel’s payments solution inour processes. The benefits to MobitelNovember 2008 and its collectionsboth in terms of process enhancementssolution in January 2009. It had 47and value creation are significant.”collection centers enabled by July 2009.By streamlining its end-to-endcollections, Mobitel can maximizeits days payable cycle and workingcapital needs while enhancing itsreturns on surplus cash.
“The Citi team was able to structure asolution that truly enhances our processes.The benefits to Mobitel both in terms ofprocess enhancements and value creationare significant.”Nishantha WeerakoonSenior General Manager in Finance and Procurement, MobitelWomen picking tea outdoors, Nuwara Eliya, Sri Lanka.
The challengeCNS was incorporated in 1985,18following the deregulation ofthe US aviation industry. Thissubsidiary of the International Airair cargo agents, and freightto the e-billing platform andforwarders who exported freightcreates payment files. Finally, filesfrom the US, and to take advantageare disbursed electronically toof the growing market demand for athe airlines’ banks along with thepaperless service.remittance detail information.The solutionThere are many benefits of Citi’sTransportation Association (IATA) isdedicated to the entire air logisticsCargo Network Services (CNS)Leveraging technology to improve collection efficiencyCNS, a subsidiary of the International Air Transportation Association(IATA), is dedicated to the entire air logistics chain and provides a uniqueset of business solutions that meet the requirements of the air cargoindustry in the USA.chain and provides a unique setCNS and Citi developed an electronicof business solutions that meetbilling and payments solution thatthe requirements of the air cargosignificantly enhanced the company’sindustry in the USA. CNS servesexisting service, CASS-USA.as a key gatekeeper by requiringair cargo agents, forwarders,With the new solution, the airlinesor intermediaries to meet a settransmit their waybills via electronicof financial, operational, andfile delivery to CNS’s data center.compliance standards.CNS then consolidates the invoicesand sends them to the airlines’Discussions with CNS and the air
Mando Brand Assurance EMEA Citi Prepaid Cards offers turnkey solution for reward scheme 180 Men’s Wearhouse NA Prepaid card solves payroll delays and improves efficiency 184 Toyota USA NA Citi Prepaid revolutionizes sales incentive
