PMC Treasury > Case Studies > Case Studies > Foreign Exchange > Treasury Solution FX Reviews – Furniture Manufacturing

FX Reviews – Furniture Manufacturing

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Client Brief

PMC was asked to review and comment on the FX hedging processes of a Taiwan-based company, following a recent acquisition by a financial sponsor.

PMC Solution
  • Conduct extensive on-site discussions with senior management and Business Unit; managers in order to develop an in-depth understanding of the FX and commodity risks generated by the business and how these changed over time;
  • Perform a desk review of Group and Business Unit level reporting and hold discussions with Group Treasury to understand the existing approach to managing FX and commodity risk;
  • Produce a detailed report which provides a number of recommendations for change to the business’ internal information flows;
  • Document the risk management policy.
Results & Recommendations

By implementing our recommendations, the business was able to assess its FX and commodity exposures more accurately, enabling these risks to be identified and managed more effectively.

Why have an FX Review?

  • Understand the real, underlying FX exposures that your business faces
  • Show how your FX risks can be better managed in both financial (cash flows and balance sheet) and commercial terms

When to have an FX Review?

  • If you have a new management team
  • When FX markets are volatile
  • During acquisition/divestment activity
  • Or if you simply want a specialist to optimize your approach

What is PMC’s Approach?

Your bespoke review will consist of two phases:

  • Stage 1 – Management level meeting to understand your FX risks, the current risk management approach and any other commercial/financial constraints. We will then provide practical recommendations for improvement
  • Stage 2 – Generation of an FX model and draft Board policy document, providing the quantitative basis and governance framework for hedging activity

We also offer representation on Treasury Committees where FX is a key risk being managed.

How we add value?

  1. Experienced and independent specialists providing clear insights into, and applying current market practices towards the management of, your FX risks
  2. Providing a clear road map for improvement or reassurance that no change is needed

At the end of this process, you will have the practical analytical and policy tools, in a bespoke solution, for the ongoing and effective management of your FX risk