SMART Modular Technologies, the Malaysian maker of computer memory modules, wireless communication devices and wireline sub-systems, is moving to consolidate its cash management activities with one bank.
The company has mandated ABN AMRO to handle regional payments, receivables and liquidity management from its treasury office in Malaysia. The mandate currently covers transactions in Malaysia, China, India and Korea but is likely to be extended to other Asian countries.
SMART says the plan to move to a single bank platform supports its expansion strategy and will allow it to unlock working capital in countries such as India. ABN AMRO has provided SMART with an escrow account-based solution and foreign exchange capabilities. The bank plans to integrate its BankStation product, which simplifies and consolidates electronic payment initiation and reporting, with SMART's own ERP system. By using this technology to generate accurate and timely financial information, the company hopes to be able to make more effective decisions about the use of its working capital.
"We will be able to improve the efficiency of SMART's regional treasury function and risk management through use of accounts held by us in all the countries involved," says Humphrey Valenbreder, ABN AMRO's working capital country head for Malaysia.
SMART's chief financial officer, Jack Pacheco, says ABN AMRO took the company's challenge and "turned it around". "The bank's advisory approach, timeliness and in-depth banking knowledge of the Asia Pacific countries won us over," he says.
ABN AMRO's country head for Malaysia, Jeremy Oliver, says the bank's capabilities in countries like India and China were key to winning the mandate. "Our client's willingness to engage with us and share its issues and challenges, proved to be the winning combination for this transaction," says Oliver.
