ABN Amro unveils financial supply chain products

ABN Amro Bank has ABN Amro Bank has introduced a working capital concept, which will balance risk and efficiency across the supply chain. To this effect, the bank has launched two products in India "" channel financing and maxtrad.com.

According to Daniel Cotti, managing director, ABN Amro Global Trade Advisory (working capital group): "Asian businesses have an estimated $40 billion of working capital trapped in inefficient financial processes. The bank has started helping Indian corporates to unlock the working capital by making their financial supply chains more efficient."

Cotti cited an example of how a Turkish company had $500 million trapped in working capital. However, by using three working capital solutions from ABN Amro "" receivable financing, discounted letter of credit syndicated structure and supply financing "" 25 per cent of the working capital was freed up to support the growth strategy.

In his meetings with various corporate clients Cotti found that many of the family-owned clients, being cash-rich, wanted to utilise the working capital concept for best use of cash, and still have the flexibility.

"Decreasing the amount locked up in working capital has become important today to Indian corporates as they need additional funds to support growth strategies, tap new markets, provide liquidity and mitigate risks," said Cotti.

The move towards real time gross settlement (RTGS) by January 2004 will see greater dependence of corporates on banks, and this will further drive demand for trade solutions.

"Demand for our solutions will be basically driven by exposure management and country risk, supply-chain financing needs, digital connectivity through the web and management of transactions," said Cotti.

"We aim to become the number one bank for our clients in India on global trade, as we play the role of a strategic partner," said Cotti.

Meanwhile, ABN Amro in its channel financing product on the supply side will focus on limited number of industries.

"Thinking big and acting small is our motto," said Cotti, adding that while the potential is huge in the country, it is prudent to start small.

"We have chosen portfolios rather than offering blanket exposure to corporate clients," he added.