Danone's sustainability vision reflects the company’s commitment to operating in an efficient, sustainable and responsible manner. Treasury has been a key part of this. Supported by partner bank HSBC, Danone’s Asia Pacific treasury team has taken an innovative approach in helping advance Danone’s commitment to responsible business practices and growth.

    Balancing growth and sustainability

    Danone has established a unique growth model that balances profitability and sustainability. Efficiency, agility and best-in-class productivity are key to this, including a global objective to achieve EUR700 million in operational savings by 2023.

    Danone’s regional treasury in Singapore worked closely with its HSBC relationship team to understand the company’s needs in Asia Pacific, and identify opportunities to digitise and automate processes through innovative, tailored cash management solutions. By minimising manual processing, increasing scalability and improving productivity, the treasury team would then be able to devote more time to supporting and delivering value to the business.

    We identified a tantalising opportunity to help support our corporate ambitions by standardising regional treasury processes, and centralising control of cash to provide a more timely and complete view of cash positions and investments. This would allow us to do more for less, and position our treasury team for future growth.

    Zurab Abutidze, Regional Treasury Director
    Asia Pacific and Middle East, Danone

    Achieving a balanced growth model

    Danone’s treasury team worked closely with HSBC and its technology partners to implement initiatives that would help to meet their efficiency, productivity and sustainability objectives. These included:

    Technology integration

    Danone’s treasury team had implemented Kyriba as its core treasury management solution, and Bloomberg GO for an automated execution of FX. The team also had a variety of electronic banking platforms in place. The team was therefore seeking to integrate these solutions to achieve a faster, simpler, centralised digital infrastructure. This would enable them to automate treasury processes, including FX execution, improve visibility and control over cash, and make better decisions.

    Danone worked with HSBC to rationalise its HSBCnet profiles across its various accounts and entities. HSBCnet and SWIFT was then integrated seamlessly with Kyriba to provide treasury with a single point of visibility across all 55 HSBC accounts in the region as a first phase.

    Transparency over account billing

    To ensure accountability and auditability of bank fees, Danone worked with HSBC to deliver account billing statements for 86 accounts automatically to Kyriba. As a result, Danone now has full transparency over bank fees in a standardised format to allow better reconciliation and comparison.


    Digitising and streamlining receivables

    In Indonesia, Danone’s largest market in Asia Pacific, the treasury team worked with HSBC to implement the bank’s Virtual Accounts solution and Digital Accounts Receivable Tool (DART).

    Three hundred distributors have been issued with virtual account numbers, so Danone can reduce the number of bank accounts in the country, and automate its reconciliation and data analytics. DART provides buyers and distributors with a centralised channel for invoice communications, reducing the number of invoice queries from distributors, and making it easier to do business with Danone.

    Companies across Asia Pacific are looking for opportunities to harness digital technologies to improve receivables management. HSBC has invested heavily in digital innovations such as DART, which empowers clients through better control over receivables in providing a centralised, digital space for real-time communication on invoice status.

    Lewis Sun, Regional Head of Product
    Global Liquidity & Cash Management, HSBC Asia Pacific

    By implementing Virtual Accounts and DART, Danone has made considerable efficiency improvements, including saving 12,000 minutes a year on receivables reconciliation for Indonesia alone, and improving productivity for both the treasury team and the company’s buyers and distributors.

     

    Sustainable supply chains

    Danone recognised that robust and sustainable supply chains are crucial to achieving its balanced growth model. To do this, the team extended its existing supply chain finance (SCF) programme in Indonesia to a wider spectrum of suppliers across multiple businesses. They further replicated the structure in its regional procurement hub in Singapore, along with local programmes in Turkey and the UAE. The SCF program now mirrors Danone’s procurement structure, so critical suppliers across all locations are able to optimise their working capital. This resulted in a more resilient supply chain during the pandemic, and reflects Danone’s ambition to be a responsible business partner. The team also automated early payment processes to suppliers in Indonesia and other markets to increase efficiency, reduce costs and ensure that suppliers could gain immediate access to funds.

    Supply chain conversations have shifted over the past couple of years from focusing on cost and efficiency to resilience and sustainability. HSBC and Danone both recognise the strategic importance of ensuring that suppliers are able to get the support they need. By implementing bespoke and innovative supply chain solutions, they can better ensure that goods are delivered to customers to meet and exceed their expectations.

    Iain Morrison, Head of Global Trade and Receivables Finance
    HSBC Singapore

    Responsible investment

    Treasury was keen to maximise the return on its surplus cash to deliver additional value to the business and enable its balanced growth ambitions. This included placing surplus cash into Jintrust, HSBC’s money market fund in mainland China. Danone is also placing funds into HSBC’s newly launched Green Deposits programme in India. Green Deposits are used to fund a portfolio of sustainable assets, providing competitive returns on surplus cash whilst having a positive environmental impact.


    Social responsibility is at the heart of everything we do at Danone. From the products we make, to the way that we conduct ourselves as a business. The Green Deposit in India was a valuable chance for our treasury to help advance other aspects of our organisation’s mission.

    Zurab Abutidze - Regional Treasury Director,
    Asia Pacific and Middle East, Danone


    Financial Health, Resilience and Sustainability

    Achieving a balanced growth model combining profitability and sustainability is a long-term and continuous objective. Even so, Danone’s treasury team has already achieved significant improvements in efficiency, visibility and sustainability through the initiatives it has undertaken so far, including operational improvements amounting to around 91 days per year.

    The value of digitisation, automation, centralisation, yield enhancement and supply chain resilience has been particularly apparent during the pandemic. By integrating cash and integration flows, treasury has been able to produce timely and accurate management reporting, as well as responding in an agile way to changing market conditions.

    We have not simply enabled faster processes, we have also become a more proactive function, with access to richer, more rapid information. We have become more resilient and agile, which has been vitally important during the COVID-19 pandemic, enabling us to be more responsive in deploying funds where they are most needed, control costs and mitigate business and supply chain risks.


    Zurab Abutidze, Regional Treasury Director
    Asia Pacific and Middle East, Danone


     

    HSBC and Danone have a shared ambition to achieve a balanced growth strategy - expanding our role as responsible corporate citizens whilst driving value for shareholders and competitive customer offerings. HSBC continues to invest heavily in digital solutions that help clients to build smarter businesses and become more sustainable.


    Winnie Yap, Managing Director
    Head of Global Liquidity and Cash Management, HSBC Singapore

    Disclosure and disclaimer

    More, collapsed
    Join the conversation?

    Join our Linkedin group to get an unparalleled view of macro and microeconomic events and trends from a bank that is a leader in both developed and emerging markets.