Entering complex countries? Start with an exit strategy

VIDEO | For many organisations, expansion into emerging markets is marked with excitement – and hopefully, lucrative potential. For treasurers, however, it might mean challenge after challenge. At the Treasury 360° conference, Andrea Sottoriva of SITA and Karen Van den Driessche of Ontex took to the stage to talk about managing treasury in complex countries – from trapped cash and fluctuating exchange rates to unclear regulations.

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An organisation that has made a decision to move into emerging markets should “already start thinking about an exit strategy”, suggested Driessche.

An exit strategy – and a more in-depth understanding of potential challenges – are just some benefits of involving the treasury in these decisions from the very beginning, she said. Unfortunately, this is not yet common practice within organisations today, and treasuries are often only brought in midway.

Sottoriva, pointed out that an exit strategy is not always an option. As a provider of technology to airports and airlines in 180 countries, SITA has to “be present nearly everywhere in the world”, no matter the concerns about certain countries.

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He described treasury in SITA as a centralised function – “I still believe that centralisation, from a cost point of view, is the right thing to do”. However, in areas of the world where local regulation expertise is necessary, the firm would seek local representation.

Nurturing relationships is important when it comes to working with local counterparts. “My role as treasurer, I believe, is to be technical when I need to be technical, but also remain human and able to communicate what we are trying to achieve,” Sottoriva shared. “In a very simple way, if you don’t articulate, you will never get cooperation.”

Driessche agreed on the importance of having local presence. Using an example from Ontex’s business in Algeria, she detailed how it took nine long months for the firm to get hold of a tax document related to a dividend payment – only after a local finance director diligently turned up at the tax administration office every Tuesday morning.

“It’s difficult to find the balance between centralised and local, but you do need people on the ground,” she said.

The panellists were:
Andrea Sottoriva, Group Treasurer, SITA, and
Karen Van den Driessche, Group Treasurer, Ontex,
under moderation by Damian Glendinning, Chairman of the Advisory Board, CompleXCountries.

 

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