Accelerating Early Payment to Suppliers – No Supplier Left Behind or an Afterthought?

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Many large corporates are defining the role and remit of their Global Process to Pay space, and attempting to align A/P Automation, eProcurement, eInvoicing, Dynamic discounting, Compliance, Vendor Management, Onboarding, etc. It is no simple endeavor and complicated by multiple subsidiaries operating in multiple jurisdictions. I am currently looking at the challenges here and also what are some of the trends around accelerating Early Payment with suppliers and in particular where are we on the life cycle of Approved Payable finance. These initiatives are complicated by the fact that Treasury, Procurement, AP and others must work together. To make significant […]

Global SCF Forum Update on Defining Supply Chain Finance

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Do we really need to define factoring the cynic may ask? Or better yet, is supply chain finance a product or a concept? Soon enough we will be informed when the industry representatives from the likes of the International Chamber of Commerce, Bankers Association for Finance and Trade (BAFT), Factors Chain International and several others produce definitions as part of the self proclaimed Global SCF Forum. As I pointed out in a prior post, this has been tried before with some effort and little to show for it. This time around, the hope is that by harmonizing the supply chain […]

Fallacy that Procurement manages ALL Spend

In very few organizations does Procurement have total control of spend. The guy that plays golf with the supplier is typically not in procurement. Of course Procurement can manage major spend categories– IT Procurement, BPO, Logistics but the vast majority of spend at companies that make things – direct expenditures on ingredients, commodities, raw materials, components, etc. is managed by the division directly. Who is best to understand the supply markets for critical supplies and all the compliance issues and market conditions? Perhaps there is a centralized group in Procurement that provides market intelligence, but the end users are the […]

TXF Media Commences Commodity Traders Borrower Database

TXF recently completed their inaugural commodity finance market overview. The report gives us a peek into two of the most common deal structures for commodity lenders – revolving credit facilities and Pre Export Financings (PXF). There are many variants of PXF finance, but typically these loans cover the purchase of raw materials and costs associated with processing, storage and transport or capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). Borrowers are typically primary producers – extraction companies, energy, soft commodities, etc. with relatively limited access to capital markets, Processors – refiners, mills, smelters […]

3 Reasons Banks’ Trade Finance Business all Chase the Same Deals

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Global Finance Magazine wrote an article the other day saying a greater supply of capital and a dip in demand are strangling the trade finance business and that trade pricing has been driven down quite significantly. It went on to speak with various trade bankers from Citibank, HSBC and Standard Chartered all saying margins are eroding and one banker, Simon Constantinides, went so far as to believe some banks will exit the business by selling their trade finance operations. John Ahearn, Citi’s trade head, concurred saying, “The only way you survive this is to go for scale.” The issue that […]

Commerzbank’s reaction to Palm Oil and sustainable Trade Finance

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Trade Financing Matters welcomes this response to yesterday's post on sustainable palm oil from Ruediger Senft, Head of Corporate Responsibility at Commerzbank The problems associated with the trade of palm oil are certainly real and ones that Commerzbank has been aware of for a number of years. As such, we have done our utmost to push sustainable trade forward, for example, by establishing strict sustainable lending criteria. In 2007 we entered into direct talks with the relevant market entities and a code of conduct for the supply of palm oil was jointly devised. Later, in August 2014, Commerzbank became the […]

Palm Oil and Sustainable Trade Finance

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I like how we like to think we are doing something about this world and trade bankers are as guilty as the rest of us. We now have this movement to sustainable finance. Heck, Global Finance magazine just gave Commerzbank an award for sustainable trade finance. And then I watched an episode of Vice on Palm Oil titled “Indonesia is Killing the Planet for Palm Oil." It was downright dreadful and full of greed. Indonesia is being deforested faster than any other country in the world, and it has everything to do with one product: palm oil. Palm oil goes in […]

Why the smartest people are real scared

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The Milken Institute’s Global Conference held recently in April gets together with a mission to put some smart people together to look at the worlds most pressing challenges, and seek solutions. Fortune magazine reported on the events here, and while I was not surprised by what was said, I was surprised that is was in the public domain. There is an underlying fear from some of the top minds, ex policy makers, investors, etc. If you missed the article, it’s worth a read. The fear centered on a number of topics Demographics Billionaire real estate investor Sam Zell said in […]