Heavy maintenance

Case Study #4 – Aerospace Manufacturer – Multinational

Business Challenge

  • Having seen an increase in sales in aerospace products and parts, Company D switched to RMB invoicing in 2012 and manages its RMB exposure in the same manner as any other currency.
  • Now comfortable with the amount of liquidity in the offshore RMB market, Company D wants to improve on how it manages its intercompany loans between its central treasury and its subsidiary in China on a corporate basis to avoid taking out loans with a third party.

Sector Background

  • The aerospace product and parts manufacturing industry is important to Canada’s manufacturing sector, contributing $27.8 billion to Canada’s GDP and employing 172,000 people in Canada in 2013.
  • It is also a top 10 exporting industry to China, with nearly $500 million in exports to China in 2014.

Solution

  • Company D applied to SAFE for a quota.
  • Company D has put cross-border RMB pooling in place between its central treasury department and its subsidiary in China.

Outcomes

  • Financing costs have gone down.
  • It is easier to move money in and out of China – less paper work and reduction in manual processes.
  • It has created greater flexibility to make payments to suppliers in RMB, pay employees and make investments.

Next Steps

  • Open RMB bank account in Canada.
  • Access RMB liquidity and investment options.

Did you know?

  • All five of Canada’s largest banks have significant operations in BC.
  • According to latest GFCI, Vancouver is the 5th most powerful financial centre in North America.
  • Vancouver ranked third most livable city in the world by the EIU.
  • Vancouver is among the top-10 wealth management centres in the world.