Key takeaways
- To maintain global growth and increase agility, flexibility and accountability, Minerva Foods (Minerva) needed to improve its working capital
- Minerva implemented a sales finance solution with J.P. Morgan Payments to enhance its accounts receivable line and achieve better cash management
- According to Minerva, the solution reduced manual work for the treasury team, increased global sales, prepared the company for a large acquisition and facilitated 4,000 sales invoice discounts within eight months¹
About
Minerva, a South American beef exporter, strives to improve its management methods to maximize opportunities, while being dedicated to high productivity, quality and food safety. As the company grew globally, it needed to be more efficient, so Minerva found a solution to improve its working capital.
The challenge
To generate the free cash flow and sustainable, long-term cash returns a high-growth company needs, Minerva maintains strict control of its working capital. Chief Financial Officer at Minerva, Edison Ticle, shared that account receivables are the most critical working capital line, with export accounts driving around 75% of its operations.
The treasury and export teams manually performed tasks like invoice discounting, counterparty limit controlling and additional risk mitigation to manage working capital. This demanded tremendous time and introduced the potential for human errors.
As sales increased in global markets, the need for more effective tools and processes became clear. By improving the receivables line, Minerva knew it could also enhance its working capital, making cash more available and increasing agility, flexibility and accountability.
Minerva needed a solution that combined cash management and receivables discounting to mitigate payment risk for Minerva’s global buyers by facilitating earlier payments.
“Having solutions that can boost our working capital and administration is key to successfully continuing our global journey.”
Edison Ticle
Chief Financial Officer, Minerva Foods
The solution
Minerva implemented a receivables discount solution offered by J.P. Morgan Payments that enhances Minerva’s receivables program and connects to the company’s enterprise resource planning (ERP) system for better cash management. Ticle shared that through the program, which went live in June 2023, Minerva has discounted more than 4,000 sales invoices from clients across countries in Latin America, Europe and Asia in the first eight months. It also reduced Minerva’s receivables maturity from 60 days to two days.
Improving working capital helped Minerva improve efficiency and increase its available cash for business operations and growth. According to Ticle, this prepared the company to complete its largest acquisition to date, which will increase its production capacity by nearly 50% by late 2024.2
“Having solutions that can boost our working capital and administration is key to successfully continuing our global journey,” says Ticle.
In addition, because the solution from J.P. Morgan Payments is paperless, it significantly reduced the amount of work for Minerva’s treasury team. Ticle shared that it not only eliminated the need to submit thousands of invoices, but also increased global sales. Now, Minerva’s treasury and export teams can focus on more strategic tasks.
The results
Minerva expects to continue strengthening its domestic and global client base by adding value to international distribution. The company also plans to increase the size of the program with J.P. Morgan Payments to support the overall business goals of its South American subsidiaries. In addition, it will use the technology and process that it built to replicate the solution with its partners.
References
Beef Central. (August 29, 2023). Brazilian beef giant Minerva buys 16 meat plants from rival, Marfrig. Retrieved July 19, 2024
Disclaimer
© 2024 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC. Deposits held in non-U.S. branches are not FDIC insured. Non-deposit products are not FDIC insured. The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit jpmorgan.com/paymentsdisclosure for further disclosures and disclaimers related to this content.
