Primetals Technologies: Orchestrating a symphony of treasury innovation
The treasury team at engineering and plant construction firm Primetals Technologies received a ‘Highly Commended’ award in the risk management and resilience category at the 2023 EuroFinance Treasury Excellence Awards.
In the ever-evolving landscape of global finance, Primetals Technologies stands as a beacon of transformation. Led by Jeremy Hamon, Head of Group Finance, the treasury team has pivoted from being a small-scale operation to becoming a robust, forward-thinking department. This transformation has made them the linchpin of the company’s global operations and exemplifies how modern treasury management can drastically reshape a corporation.
The treacherous starting line
Picture this: you’re given the responsibility to create an entire treasury department from the ground up. You have one employee (yourself), zero central bank accounts, and no structural blueprint. Plus, the clock is ticking—fast. This was the task faced by Jeremy Hamon. The company needed to leave a cumbersome, albeit powerful, centralized in-house banking system. The previous system, while efficient, was a maze for users outside of the central treasury, leading to low global user engagement facing its complexity.
It was evident that the task at hand was not merely to implement a treasury management system but to envision a holistic solution that addressed several complex challenges including a centralized cash management across the group, optimize intercompany clearing and financing, streamline FX trading and reduce the plethora of bank accounts and payment formats.
Cash management revolution
By partnering with a third-party financial platform known for its innovative solutions, the company achieved transformative results. One of its most significant accomplishments was gaining real-time visibility into cash flows, intercompany concentrations, and foreign exchange activities. This enhanced level of clarity in liquidity planning was like switching from using binoculars to peering through a high-resolution telescope.
Employing innovative POBO (Payments on Behalf Of) and ROBO (Receivables on Behalf Of) models, the treasury team not only centralized cash management but also revolutionized it. Through these efforts, they reduced their relationships with core banks to just three and eliminated over 100 redundant bank accounts.
Furthermore, the introduction of a payment factory had implications far beyond mere process simplification. By standardizing all payments into a single format, the treasury team was able to unlock seven-figure interest gains, and with the use of artificial intelligence, Primetals was able to secure more than 200,000 payments annually, paving the way for further AI applications in strategic financial decisions.
Remarkably, the foundations for this transformation were achieved in a mere six weeks, proving what a committed team can accomplish under decisive leadership. With this robust foundation in place, Primetals Technologies is now leveraging on an artificial intelligence for fraud prevention with intention to broaden its usage wherever applicable in its Finance activities.
Primetals Technologies has emerged as a key player and innovator in the ongoing financial evolution. With a treasury team that expanded from one to ten and a financial strategy that became a global standard in a short period of time, the company exemplifies what is possible in today’s financial landscape and rightfully deserves the 2023 EuroFinance Treasury Excellence Award.