Agrifirm - Treasury getting back in control

Background

Royal Agrifirm Group contributes to a responsible food chain for future generations. Agrifirm delivers measurable, relevant and sustainable value at farm, field and industry. Founded over 120 years ago in the Netherlands, Agrifirm now is a leading agricultural cooperative with an international network of subsidiaries within Europe, South America, United States of America, Asia and a worldwide distribution network. Agrifirm Group strives to be the preferred knowledge and solution-driven partner for our customers in animal nutrition, crop cultivation and animal, plant and soil health.

Project definition

Agrifirm’s project goals were two-sided. First: to get such a flexible and future proof cash management setup which would bring Group Treasury fully in control of all the cash management operations, limit the number of banks and accounts, optimize integration with the finance structure and optimize costs. Second: select a limited amount of qualified cash management banks which would be able to fulfill the needs in quality and costs both locally and centrally.

The new cash management setup and selected banks should create a future proof environment and should be able to evolve in the future to a more central cash management approach.

Project approach

Together with Group Treasury at Agrifirm, Orchard Finance designed in the first phase, Agrifirm’s future cash management setup. This design resulted in an account strategy (accounts at external and internal banks, ownership of the accounts), a bank strategy and a cash pool strategy. This future cash management setup was discussed with the local finance managers and approved by the CFO.

By knowing the designed future cash management setup, Orchard Finance was able to tailor their RFP standard for Agrifiirm in the second phase of the project. Also, Orchard Finance was able to shortlist a group of potential cash management banks fitting Agrifirm’s needs.

In the third phase, final selection of the new cash management banks took place. With the standard Orchard selection approach, a level playing field is created for all banks for a fair selection of the cash management banks. With the RFP approach also the relation with the non selected banks stays positive.

Results

Agrifirm can now implement a highly bank independent and future proof cash management setup. With the selected cash management setup, banks will deliver high quality services for a shart market conform fees. The migration impact for the entities is minimal, however the number of bank accounts will be limited for more than 80%, the number of worldwide used active banks will also be reduced with 80%. The cash pool mechanism will be much cheaper, more flexible and still efficient and effective. After implementation of the new structure Treasury will become in control of all the used EB systems and is able to manage all users, limits and possibilities.

“Orchard Finance operated as a real partner during all the phases of the project. They delivered a good future cash management solution, their RFP procedures and documentation works and Orchard did everything according to plan and planning.”

Kees Vermeij - Manager Tax & Treasury Agrifirm