Briefly, a treasury centre acts as an in-house bank for multinational companies. Its major functions are intra-group borrowing, as well as cash and liquidity management. It also makes payments to vendors and suppliers, and supports the raising of capital by the group and facilitates risk management.  

The advantages of a treasury centre include reducing costs and improving operational efficiency. This is achieved in serval ways such as: optimising external and internal funding, cash pooling to make the most of available cash, reducing banking and transaction costs through the standardisation of multi-currency transactions, reducing foreign exchange risk by centralising its management, and improving the efficiency of working capital by centralising the management of accounts payable and receivable.

In the past, countries like Belgium, Ireland and Switzerland were popular European destinations for establishing a treasury centre, but over the last decade or so, Luxembourg has been making its mark too. 

According to Momper, “The ready availability of people with financial experience,” was one of the key reasons Ald chose Luxembourg, to the surprise of other members of the group.

“Ald Automotive is present in 43 countries, so our culture is very international,” he continued. “Part of our financial management is based in Northampton, England, another is in Madrid. So why not Luxembourg with its international connections, multilingualism and financial know-how?”

As Ald Automotive is a wholly owned subsidiary of the Société Générale Group, the fact that Luxembourg host another subsidiary in the shape of Société Générale Bank & Trust (SGBT) was also a reason behind its choice.

“We work very closely with SGBT. They bring us their expertise and their software, which allows us to operate the treasury centre with a team of five people," explained Momper.

Dominique Roger, general manager of Ald Automotive Luxembourg, is pleased to have convinced the group of the expertise available in the grand duchy. "Financing is very important, and we needed experts in this area to support all of our subsidiaries,” he said. "We need to make sure that our subsidiaries do not make cash-related mistakes, it takes experts to control all that."