The Challenge
As Celltrion continued to grow and expand across Europe, the regional treasury hub in Hungary became the primary purchasing entity. This Hungarian center would sell the purchased products to Celltrion subsidiaries around the world, receiving payment from the subsidiaries in each of their local currencies. Celltrion Healthcare did not wish to open accounts in all the currencies of the subsidiaries, as it knew that this would be complicated and costly from an efficiency perspective. Instead, it sought an automated solution which would provide FX centralization, full control, and instant visibility so that it could mitigate currency risks and more effectively manage cash. The currencies initially in scope were Danish Krone, Swedish Krona, Norwegian Krone, Swiss Franc, Pound Sterling and Romania Leu.
The Solution
Citi has been providing Celltrion with global cash management since 2018, and we have formed a strong relationship with the company that allowed us to understand the challenges and suggest an integrated FX solution that could simplify operations. Citi proposed a process for Celltrion Hungary whereby FX spreads could be pre-agreed and locked in when the subsidiaries were sending local currency payments. The Hungarian entity would receive the payments in a single currency, at the expected exchange rates, without having to open multiple accounts. The speed of implementation was also important for Celltrion. Citi was able to set up the solution in under 24 hours, and the day after implementation the company was up and running, immediately benefiting from the solution. After the success of the initial currencies in scope, Celltrion has already started adding more, such as Canadian Dollar, and continues to look for further opportunities.
The Benefits
Speed: No technological implementation needed
Automation: Automated FX conversion without manual interruption
Cost efficiency: Negotiated pricing in advance, no foreign exchange markups from suppliers, and reduced 3rd party bank charges on local currency payments
Simplicity: Simple, straight through wire payments that allowed the company to redeploy resources to other important tasks
