Domestic multinational businesses in the United Arab Emirates (UAE) are an essential part of the Emirati identity. These businesses touch every sector of the national economy, and their activities are felt right across the length and breadth of society.
Many of these businesses are a source of pride for the country and its people. In one of the fastest-developing nations in the world, they have played a crucial role in shaping the journey towards prosperity over the past 50 years. They have also enabled the UAE to build its indigenous capabilities across priority sectors. From energy, automotive, hospitality, aviation, consumer, agriculture and many others, these industries have been dominated by domestic businesses of all shapes and sizes. Some, especially the conglomerates, are brand names with global recognition.
As the UAE forges ahead with its ambitious economic development plans, businesses in the Emirates are moving in tandem and have embraced technology to ensure they keep pace with changing consumer behaviour as well as increased competition. The goal for these businesses is to not only stay relevant, but to also make their mark in the global market.
Al Dahra is one such company that has embraced innovative technology to unlock efficiencies in the agricultural sector and to also use this technology to build a digitally efficient organisation. Al Dahra is a prominent multinational leader in agribusiness, specialising in the cultivation, production and trading of animal feed and essential food commodities, plus end-to-end supply chain management. Serving a large customer base from the government and commercial sectors, Al Dahra has a widespread geographic footprint, operating in more than 20 countries and catering to more than 45 markets with a leading position in Asia and the Middle East.
The corporate treasury team at Al Dahra – led by Gianluca Elmosi and Vineet Gupta – is tasked with transforming and creating a future-proof treasury function. Although the duo works on many fronts, group treasury manager Gupta has specific responsibility for enabling digitisation of group-wide treasury activities to achieve better visibility, efficiency and decision-making.
He affirms the importance of using technology to take control of cash management to future-proof the business: “The diverse geographical presence of our business across the globe requires us to be agile and innovative,” he says. “This involves adopting a mindset to evolve with time if not ahead of it, in particular, building our readiness to meet the future demands of the dynamic nature of our work. This is a transformation that should be embraced and not resisted.
“A big part of embracing this transformation is understanding our current operations and capabilities, and how these can be improved by applying technology,” he explains. “Through a strong time-tested relationship with FAB, it made sense to leverage FAB’s expertise to outline and execute the immediate steps and to engage in a transformation journey together. We consider FAB our strategic banking partner in our organisation’s current and future growth plan. I admire its approach, where it goes above and beyond to help its clients adopt best practices by establishing a treasury advisory team that brings global corporate treasury experience.”
FAB’s treasury advisory team was engaged to work collaboratively with Al Dahra to design the future landscape that would enable a high-impact treasury function for Al Dahra. To date, FAB has developed expertise and capability in helping corporates in the UAE with their treasury transformation needs, empowering them to gain greater visibility and to take back control of their finances with the goal to maximise yield and reduce their operating costs.
The project started with workshops to understand Al Dahra’s current structure, pain points and future plans. Utilising its global experience, the treasury advisory team created a road map, which used the current treasury set-up as the basis of developing the ideal treasury function, drawing on global and regional experiences.
To continue as one of the UAE’s most forward-looking and dynamic businesses, it was imperative for Al Dahra to have greater visibility and control over its cash. Therefore, one of the primary objectives as advisers was to deploy treasury best practice and to create the business case for optimal cash management.
For a project like this, it was obvious that we would require the commitment and support from internal stakeholders. Much of the success of the project was down to the alignment between these unique internal stakeholders along with their willingness to embrace change.
For treasury transformation projects, we have built our own project management and governance model. Through this we have been able to ensure all tasks and risks were managed effectively, allowing us to mitigate against potential future risks.
Through this project we were able to rationalise bank accounts across subsidiaries within the UAE, which helped Al Dahra reduce its short-term borrowing by employing the idle cash, offsetting debt on a daily basis under the agreed cash concentration structure.
In addition to this, our solutions have helped to not only automate the cash sweeps, but also provide participating entities access to their cash as and when needed.
“I particularly like the ‘dynamic limit’ functionality of the solution, which provides participating entities full visibility on their cash position and let them manage effectively,” Gupta says. “This functionality also ensures the entity can only use the cash that it has contributed to the pool.”
Looking more broadly at FAB’s treasury solutions, our corporate banking apps play a prominent role in helping businesses gain better visibility on their balances, all at the touch of a button through our Corporate Mobile App. This has proved especially useful for those with multiple interests in different markets.
The bank understands the evolving needs of businesses, as such it continues helping corporates with their treasury needs, by working hard to share global best practice and to design treasury frameworks.
Moreover, in a constantly evolving ecosystem, FAB understands that each company’s treasury requirements are unique and continuously evolving; there is no one-size-fits-all solution here. Therefore, the bank takes into consideration clients’ needs, which it uses to then develop a road map to bring in global best practices to meet domestic needs, all through timely and transparent coordination between various stakeholders at FAB from the coverage, cash advisory and IT teams.
Tariq Hoodbhoy, managing director, head of treasury advisory in global transaction banking (GTB) at FAB, laid out the bank’s capabilities: “FAB’s treasury advisory team is there to help clients across different sectors in their treasury transformation journey to FAB across its global footprint. We bring in global best practices that can be intertwined with our clients’ current business processes and help them gain visibility, control and manage financial risks.”
Gautam Dutta, managing director, global head of cash management products in GTB at FAB, captured the essence of the project: “At FAB, we are continuously investing in building sophisticated products to help our clients become more efficient and better manage their operational and credit risk. Keeping that in mind, FAB decided to set up a treasury advisory unit to help our clients in solutioning and transforming their treasury organisation and instil effective governance for successful transformation – from inception to the refinement of policy and procedure upon completion.”
Tariq Hoodbhoy is managing director, head of treasury advisory in global transaction banking, at First Abu Dhabi Bank. If you want to know more about how FAB treasury helps, contact him at tariq.hoodbhoy@bankfab.com
