ChemChina (Singapore)

Highlight: ChemChina’s newly established Singapore office needed the backing of OCBC to ensure it could get up and running quickly. With the help of two structured letters of credit, its working capital wasn’t painfully drained.

China National Chemical Corp (ChemChina), owner of the country’s largest chain of standalone refineries, opened a Singapore office in 2013 to better take advantage of its newfound licence to buy crude oil.

The procurement arm, which opened in September, naturally lacked a performance or financial track record, which made it difficult to get easy credit support from local banks.
Combined with the nature of its business, it found out that its suppliers’ credit terms were shorter (30 days) than the buyers’ credit terms (90 days), meaning it required substantial working capital to fill the gap.

OCBC worked with ChemChina (Singapore), analysing its business trade flows and operating cycle, in order to structure two letters of credit (one import, one export) within two weeks of striking up a relationship.

OCBC did not request collateral or any cash margin, which helped ChemChina (Singapore) free up spare capital to commit to key trades. It was immediately able to secure big-ticket deals of $100 million for each transaction.

“We would like to thank OCBC for the commendable support and service rendered to our company with regards to the recent back-to-back transactions,” remarked Jennifer Chan, CFO of ChemChina (Singapore). “The team worked closely with us and provided valuable advice to overcome the challenges we faced.”

Mondelēz

Highlight: The company that owns Toblerone and Cadbury Dairy Milk went to market quickly with a supply chain strategy to help stabilise volatility in its supply chain. With the help of Citi, Australia and New Zealand were the first to benefit.

The US multinational confectionery, food and beverage company comprises the global snacking and food brands of the former Kraft Foods. Following the spin-off of its North American grocery operations, Mondelēz started life in testing economic climes.

In response to these pressures, Mondelēz needed to improve financial and operational efficiency while maintain a strong supplier relationship that could weather the volatility. Mondelēz Asia-Pacific decided to implement a competitive supply chain programme that would minimise the impact to its suppliers.

The company decided to launch the scheme as quickly as possible and develop its infrastructure, formats and connectivity in parallel with the roll out.