China Gas slows down to speed up

By extending the payment terms at a newly acquired subsidiary, China Gas is able to increase its purchasing power.
China Gas and Beijing Gas provide services to China's growing market. (Source: AFP)
China Gas and Beijing Gas provide services to China's growing market. (Source: AFP)

Getting financial and physical supply chains to meet is a treasurer's age-old problem. While technology has sped up the movement of goods, money still travels faster, creating headaches when bills come due before merchandise can hit the shelf.

Eric Leung, chief financial officer of China Gas, fixed this problem. In 2008, when the builder and provider of natural gas infrastructure acquired an 83% stake in liquefied petroleum gas LPG provider Zhejiang Zhongyou Hua Dian Energy renamed Shanghai Zhongyou Energy last year, Leung discovered a glaring irregularity in the new subsidiary's trade finances. The company was buying as much as 50% of its gas imports from the Middle East with 30-day letters of credit...

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