Japanese carmaker Nissan is to set up a treasury centre in Singapore to manage treasury transactions in Asia and handle global payments. The centre opens on April 1.
The news coincides with an announcement that Nissan has established an Asean headquarters in Singapore to oversee core business functions for the region including marketing and sales, franchise management, public relations and production order processing.
The treasury centre will initially manage the company's foreign exchange exposure in the region and perform some netting functions for cash surpluses. It will then be expanded to process Asian payments before becoming a full-blown global payments centre.
Nissan currently operates regional cash management structures in Tokyo, Los Angeles and Paris. The plan is to direct the payment functions performed at these centres to Singapore.
Speaking about the move, Nissan's global treasurer Akira Sato, says the aim is to consolidate payment transactions and reduce processing costs. "Currently each sales office and manufacturing plant makes its own payments to suppliers and often these suppliers are receiving several remittances from different Nissan subsidiaries," says Sato. "We want to integrate these payments into multiple lots and reduce the number of single transactions processed each day."
He says the biggest challenge in making the centre a success is changing the company's culture. "Each subsidiary or affiliated company within Nissan has worked using its own policies and strategies, and now they will be asked to channel through a centralized hub," he says. "Global interests should overcome local interests."
Nissan reviewed many locations for the treasury centre, including Hong Kong, Bangkok and Tokyo, before settling on Singapore. "Singapore has a good supply of talented people, offers sophisticated infrastructure and systems, and is in the same time zone as Tokyo," says Sato, explaining his selection criteria.
JPMorgan Treasury Services will assist Nissan in the early phases of the treasury centre by setting up operating accounts in Singapore. The bank already provides services to Nissan's regional cash management centres in the US, and hopes to build on this relationship.
Simon Jones, head of corporate cash management for JPMorgan in the region, says while several MNCs have implemented plans for global payment factories in Asia, very few companies have achieved full centralization. "Some of the bigger MNCs are processing proxy payments from their treasury centres, which involves paying suppliers on behalf of subsidiary offices," says Jones. "But not all suppliers are being paid this way, only the larger bulk suppliers. In-country offices are still handling payments for smaller local suppliers."
Yoshiko Terakami who is currently in charge of cash management at Nissan's treasury department in Tokyo.
