Case Study #2 – Pulp and Paper Producer – Exporter of Goods
- Company B is a BC-based manufacturer of forest products. While the United States continues to be its primary market, its exports to China have grown significantly in the past decade.
- Company B’s Chinese buyers have expressed a desire to settle in RMB.
- China is an important customer for the pulp mills and sawmills industries, which exported nearly $4.2 billion of goods to China in 2014, making it the largest Canadian exporting sector to China.
- China is the second largest importer of Canadian pulp and paper, after the United States.
- Company B opened RMB account in Canada to receive RMB payments.
- Company B set up internal processes to enable trading in RMB products.
- Company B likes that it can provide its customers flexibility as paying in dollars or RMB depends on the domestic rate of borrowing and the ease of access to the currency.
- Company B can get a higher rate of interest on RMB deposits than USD or CAD.
- Open RMB account in Canada.
- Adjust internal processes.
- Research and discuss investment alternatives with financial advisors.