A New Generation of Treasury Innovation
in the UAE
A TMI roundtable in association with D+H
In May 2015, a panel of leading corporate treasurers and both international and local banks gathered to discuss some of the most important priorities for corporate treasurers in UAE, and how the banks are responding to these evolving needs. The following is an edited transcript of this conversation. With thanks to panellists, participants and D+H for sponsoring this event.
Murali Subramanian, ADCB
What we would like to focus on first is today’s priorities and drivers for change in corporate treasury. Corporate treasury has evolved considerably in the Middle East, with far closer parallels with global best practices than five or 10 years ago. Not only are treasurers looking after bank relationships and cost management but also liquidity, funding, enterprise risk management and so on.
Toby Shore, EGA
Emirates Global Aluminium [EGA] was formed in 2014 as a joint venture between Mubadala Development Company of Abu Dhabi and the Investment Corporation of Dubai, and our core operating assets are Dubai Aluminium (DUBAL) and Emirates Aluminium (EMAL). As a new company, our priority for the next 12 to 24 months is to progress the integration of the two businesses, and leverage the strengths of both predecessor companies. DUBAL implemented a treasury management system (TMS) in 2012-13 which is integrated both with the ERP and with an online trading platform, creating end-to-end straight-through processing for treasury transactions from exposure inception through to accounting and journal entries. An early priority was therefore to extend this efficiency throughout the EGA Group.
Risk management is also huge focus area for us. We have two of the world’s largest aluminium smelters within 60 kilometres of each other, we have a refinery construction project under way, and a bauxite mine in Guinea where we are embarking upon a feasibility study. We are also acquiring assets in China. Consequently, we have numerous, quite diverse risk management challenges to deal with. From a treasury angle, we are looking to implement a common platform across the group leveraging what we have achieved so far in the TMS space and taking an enterprise-wide approach to risk. By achieving a single view across the group, we achieve a ‘single source of truth’ and can report consistently to the board and to our shareholders.
Adam Boukadida, Etihad
Our priorities are similar to those that Toby described, although as an airline, our business is quite different. Risk management is important to us too, and we actively hedge our foreign exchange and commodity risk. We also need to finance both our day-to-day business operations and our assets, for which we rely on a panel of key banks and strategic partners. Efficiency and productivity are essential for Etihad, and to achieve this, we are embarking on a two to three year major transformation programme. We have completed a request for proposal (RFP) for both treasury management and enterprise risk, and mandated OpenLink, together with SAP as our strategic technology partner for the Etihad group, which includes both Etihad Airways and the eight airlines in which we have an equity stake. We are also implementing ancillary solutions, such as online dealing and confirmation matching, to achieve end-to-end transaction processing in a similar way to EGA.