PMC Treasury > Case Studies > Case Studies > Foreign Exchange > Treasury Solution FX Reviews – Agrichemicals

FX Review Agrichemicals, Global

FOREIGN-EXCHANGE-OT-FX-Reviews-Agrichemicals
Client Brief

Following its acquisition by a financial sponsor, we were asked by a large Agrichemicals group to assist it to gain a better understanding of FX exposures and help manage the exposures arising from its operations in Europe, Asia, North and South America.

PMC Solution
  • Perform a qualitative analysis of the operational environment (via face-to-face meetings, teleconferences, and questionnaire-based interviews with commercial and finance staff based in the USA, Brazil and France);
  • Gather quantitative data and develop a detailed FX model which identifies exposures both regionally and at a consolidated Group level;
  • Act as interim FX risk manager and draft a detailed risk management policy document and establish regular currency cash flow and exposure reporting);
  • Provide hedging advice to manage currency exposures arising from the mismatches between debt financing and EBITDA mix.
Results & Recommendations

Our qualitative and quantitative analyses enabled the business to gain a strong understanding of its FX exposures. Our subsequent provision of interim FX risk management expertise assisted the business to devise a sound FX risk management approach.

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