Key takeaways
- Berry Global faced fragmented banking relationships and scattered cash reserves due to rapid global expansion and acquisitions
- The company designed and implemented a multicurrency notional pooling solution connected to its cross-regional bank accounts, which centralized global liquidity management and integrated new functionalities for more effective and efficient financial operations
- According to their Global Treasury Director Zohra Abou El Mahassine, the solution unlocked millions in global liquidity, enabled significant debt repayments and investments, reduced banking charges, and improved operational capacity and financial stability for future growth
About
Berry Global is a manufacturer and marketer of plastic packaging products with more than 250 facilities in countries around the world.1 To manage its vast operations, the company could benefit from a unified approach to handling its diverse banking relationships and scattered cash reserves. It implemented a centralized, multicurrency notional pool to optimize global liquidity.
The challenge
Since its inception in 1967, Berry Global has grown through the acquisition of various companies. Most recently, the company acquired RPC Group Plc, which added 135 locations and 25,000 employees to its business; this led to scattered bank accounts and banking relationships across multiple countries.2 According to Abou El Mahassine, not only did the company need to integrate these new assets, it also needed to optimize its financial operations to manage the company’s increased complexity and scale.
To centralize and streamline its fiscal management, Berry Global began to work with J.P. Morgan to devise a solution.
The solution
Berry Global implemented a centralized, multicurrency notional pooling solution connected to its other cross-regional bank accounts. This solution is integrated with various functionalities, such as manual sweeps, cash concentration on its J.P. Morgan accounts and multibank sweeps on cash pools from third-party banks. “With the new solution, Berry Global optimized and unlocked millions in liquidity,” explains Abou El Mahassine.
Abou El Mahassine further elaborated that, after implementing the notional pooling solution, Berry Global saw immediate value from day one. It can use the freed-up liquidity to facilitate debt repayments, further investments and reduce banking charges at other institutions by redeploying internal liquidity. By optimizing working capital and reducing debt, the company can serve its customers better because it facilitates stable and reliable operational capacity.
“Setting up the notional pool fits exactly with the vision that we had from the beginning of this project, which was gathering and centralizing the global liquidity in one place. We freed up access to millions of dollars of excess liquidity around the world.”
Zohra Abou El Mahassine
Global Treasury Director at Berry Global
The results
The notional cash pool further enhances Berry Global’s financial operations, which paves the way for future growth. Abou El Mahassine shared that, in 2024, the company will expand the solution into additional countries. Berry Global also plans to incorporate more automation and a centralized funding and investment structure, which will enable it to easily adapt to new opportunities.
References
Berry Global. (n.d.). Retrieved June 20, 2024
Berry Global. (2022, December 1). Berry Global Group, Inc. completes acquisition of RPC Group. Retrieved June 20, 2024
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