Tackling Key Treasury Challenges with Arijit Shome

So, welcome to this week's Treasury Career Corner podcast, where I interview treasury professionals about their treasury careers. Each and every week, I talk to treasurers about how they built their careers, where they are now, and where they see both themselves and the treasury profession going to next this week's show, I'm joined by Arjit Shome, the Group Treasury Director at Orjan Group Holdings. Now, old Jan is, that's the right way to say it, but is a diversified holding company active in a wide range of industries, fmcg, hospitality, real estate, packaging, materials across the Middle east and other areas and things like that. They're a family business with a rich history, as I say. Each week I'll get Ajit to explain a bit more about those guys and the company works for now. A bit later on in the show, for now, I want to go back to Ajit. He's got this great rich experience of moving from India through Saudi Arabia, through now to Dubai. And I think that's something we're going to explore later in the show. For people listening, you know that you can hear about someone that's transitioned through all those different areas. But for now, we're going to go right back to the beginning. Tell us about how you got started in your career, discovered finance, and then the wonderful world of Treasury. So, sir, over to you.

As I say, thank you very much, Mike, for inviting me to this podcast. And I would, I really thank you, you and the treasury recruitment company to sort of giving me this opportunity. First, I would say that, I mean, at the start of my career, or rather I would go back from my education days, I had not had a fancy for any science or engineering or medical profession. I was probably more focused on finance and accounting. And that was one of the reasons I focused on taking up this finance and accounting stream. From my high school days, I. And after I finished off with my graduation, I moved on to do my chartered accountants in India. And I finished off that qualification pretty quickly. To start with, yes, it was a finance role. I was interned with an affiliate of PwC. At that point of time, late 80s, early 90s, there were no computers as such. I remember doing my internship with large organizations in India, which still had those ledgers and the pencils and the red pens to take off their auditing processes. So that's the time when I started. And obviously I moved on from that auditing role to other finance roles in India. And finally in 1995, I was privileged enough to be hired for a treasurer role in a company called Nalco Water. It was named differently at that point of time because it had passed through various change of ownerships during the 10 years I was there. And it essentially was a mix of roles in Treasury. It also had the taxation in built over there. It also had legal and secretarial matters to be sort of handled as well. And most importantly I would say is that it was a US multinational company for which I had the distinct privilege to be sort of hired, I think.

Say how did you get the role? If you, as you say you were sort of qualified accountant, you'd gone through this, but you didn't necessarily. Have you had some treasury experience at Tata before? Or how did you sort of transition into straight into the treasury role as it were?

Basically my immediate prior role was in the Tata Communications whereby over and above the finance activities I was also managing the treasury activities. And at that point of time I have to say that it was essential bank relationship, making sure to manage the cash flow, making sure that cash is available and to make sure that the relationship is maintained. At that point of time there was no financing means as such, but essentially mainly focused on managing the cash. So because of this experience I was hired as the treasurer for this company, Nalco in 1995. Starting in this role it was, I mean a little bit broader from a Treasury perspective as I've just mentioned. But if I focus only on the treasury activities, it was essentially banking matters, cash flow management, there was little bit of funded facilities as well. And one of the most important things that I had experienced at that point of time was that did our first rating exercise for a commercial paper program. And I would say is that honestly speaking, I had no prior experience of a rating exercise or dealing with a rating agency as such. But I would definitely see that if you have the will, there is always a way so you get to learn on the job, right? And that is very, very important. And that is something which I would advise any person whether he's in startup or treasury role or even in a finance role, if you really are sort of wanting to get ahead in whichever profession that you are in. There is always a way and it has to be done by you. Nobody can sort of make you do it with this rating exerc little bit of financing, managing the old forex related transactions. During those days in India they were highly regulated by exchange control, the central banks. There were a lot of challenges that need to be gone through by a treasurer to make sure that overseas remittances were made. There were slight hedging involved as well. But it was not as free as I see it today. In my experience in Saudi Arabia or my experience in Dubai, you had to submit to invoices that you are wanting to pay as per the invoice terms, 30 days, 60 days or whatever to the central bank or to the central bank via your authorized dealer or the bank to which you are intending to make the payment. You have to get their approvals and then wait for the time when the foreign exchange is allocated. So that was a very rigorous process by which foreign exchange was allocated for the organization to make overseas payment. And since it was a multinational company by nature, it had to, or rather it was required to import various raw materials and ingredients. It was a specialty chemical manufacturing company, so it had its global sources, big names in the US and Europe and Southeast Asia, to import various raw materials and ingredients. And there was a phenomenal amount of outflows of foreign exchanges. So it was really a challenging process to manage the foreign exchange transactions at that point of time, considering the regulation that was involved then. The other most important thing I would say is that I also managed to sort of onboard myself to the lc, the trade finance business, the letters of credit, the letters of guarantee, etc. I had no prior experience of managing this, but again, as I said, it was all picked up on the job. And I would give credit to the CFO who hired me in 1995, thinking that, yes, I would have the potential to manage the treasury function, the organization, at that point of time. And I believe that looking back, I think I have really kept up his promise in getting me this role for the organization. Besides the foreign exchange, there was another important risk management function which I was involved in, and that was insurance. It had a manufacturing factory, it had its property insurance, it has loss of property, loss of business, and the various other transit insurance policies. So again, that was again another first whereby I learned the insurance risk management, of course, working hand in hand with the insurance provider, the insurance company, who made sure that we had a very good insurance program for the organization.

As you say, you had a great learning curve over those 10 years with that CFO, and then that was based in India. And then you decided to make a move. And we, we've done a significant amount of recruitment in actually in Saudi Arabia ourselves as a company in recent years. But, you know, you then made a move back in 2005 into Riyadh with your next move. What was that transition like? We spoke just before the show that it was, it was a heck of a move. You know, maybe talk about the company, but Also the culture and things. What was the sort of shift? So you, you're in your home country to then make the shift out of there to Saudi Arabia. What was that like? And what was the company and the, the move? Describe that if you would.

What I would say is that even after 25 years in Treasury, I'm still hungry for more. I'm looking for opportunities to make sure that my treasury to do wish list should not be complete at any point of time. So this was one of the reasons why I was looking out for an opportunity beyond my role in Nalco. And during those times there were not much of Internet or recruitment agencies. So what essentially happened was that I saw in the newspapers because newspaper ads those days where Almarai had advertised and they were looking for a treasurer to join the team in Riyadh. They were at that point of time going through a massive expansion. They were slated to do the IPO and obviously they had sort of massive expansion plans and they were wanting to hire a treasurer and they had advertised in the newspapers and they were looking for good candidates. I gave the interview and I would say is that with my, my insurance experience with my trade finance, letters of credit, letters of guarantee, managing a foreign exchange risk and of course little bit of financing and cash flow management. I was selected to join Al Marai in Riyadh in 2005. For me personally it was a big change, right? I thought it along with my family, with my parents, with my in laws and obviously the thing that drove me to do sort of take up this role far away from my home country in Saudi Arabia was essentially only one thing. I looked at my job and I looked at what it can bring value to me from the organization that was I was about to join. And I would say is that I was not, not disappointed in accepting this offer. Traveling all the way from India to Saudi Arabia, right? A vast change in culture, a vast change of working with people across from various countries across the world and essentially in multicultural organization which not only had people from my home country, but it had people from other parts of Asia, from the Middle east, as well as people from the us, the uk, Australia, New Zealand and even a few people from the US So I would say it was a big move for me, but my primary aim was to deliver value to the organization. With whatever experience that I gathered in the 10 years as a treasurer in Malcolm, I would say my expectations were fully met. And I believe that the expectations of the organization was also met because during the 10 years, the decade that I was there, I was involved in various activities for the organization. And it not only was focused on financing, which was my fort and which I developed over 10 years that I was there in the organization, but it also had the various management of interest rates, currency risk, commodity risk, insurance management, implementation of treasury management system, implementation of SWIFT for the organization. So it was essentially a varied experience which again was very, very important for me personally as a mature treasurer and of course for the organization, which definitely got the benefit of it as well.

That's solid description of the role and some of the things you're doing. But again, if I'm a listener today and we discuss this, what was the outside. Maybe outside of work but. Or within work as well. But what was the transition like from India to Saudi Arabia? How was that as a. Again we've got some of our guys who were making the move to Riyadh and moment and they're in midst mids move, you know, post pandemic and everything else. What was the best thing about it was the hardest thing. What was it like making that move?

What I would say is moving from my home country, the flexibility that I was used to all those years. So those things are somewhat different when you go over and work in Saudi Arabia. But I would say is one of the primary things which kept me motivated and kept me going was the organization. And I primarily believe that if you are good and you like your work, you like your organization, all those become all becomes primary and everything else falls in place and becomes secondary. I would say is from a family perspective. My son was very small at that point of time, so there was a big change so far as education is concerned from his moving from his home country to Saudi Arabia to Riyadh. But I would say is that we have to work out a compromise. And at the end of the day, life is all about compromises. You have something good, you have something which is not so good and you try to balance out. You cannot have the best of the world in all circumstances. So definitely I would say is you look for opportunities not only on the professional side or the personal side. You get to meet with your countrymen who are also expats in Saudi Arabia. You build up a team who work on developing and meeting at regular intervals, over the weekends, over the evenings. So all this is definitely something which has helped me in living and working in Saudi Arabia for a decade. So I would say is yes, you would be definitely seeing a change from wherever you are coming from, whether you are coming from India or Asia or Europe or UK or US But I would say is you need to have an open mind because without an open mind, I would definitely say it's not a right decision to move from your home country to one another, foreign location or jurisdiction.

So it seems like the 10 year mark is the crucial thing for those two roles. He did 10 years in that, your previous role, 10 years in that role and after 10 years in, in Riyadh, so you really knew it and everything else, you made the move, you made a couple of moves, then you made the move across to Dubai. So you know, talk us through those roles if you would. Again, you know, you've been 10 years, you'd really got into the culture, you were, you know, used to it. What was then the movement to Dubai like was just very simple or very same or what was the situation?

As I just now said that it's a compromise. You have something good, you have something bad. And one of the things that really prompted me to move out of Al Maraj or rather basically Saudi Arabia was essentially driven by personal and family considerations, right? So essentially I had to move out after my tenure stint in Almirai and my options went that either relocate back to India and that was always the default option or look for something else in the region. Because I have built my career, I've made myself known in the treasury mark in the region. During the period of 10 years that I was in Al Mari, I would say is that I was fortunate enough to bag a role in Dubai for EPC contracting company called dodcell Engineering. It was for a long, very brief period because early 2016, we all know that oil prices were at its lowest level for years and obviously it was not a very right time for EPC contracting business to flourish. So after coming to Dubai and within a period of less than a year, I was again looking for something which would definitely bring value to the organization and also to my myself. And that was the time when I was hired by ojan, which company that I am currently in at the moment.

And again, for the people that don't, you know, I give a quick outline description. Could you describe the group for you and for them rather? And you know, what does the group do? Where are your main markets? Explain to the listeners so that they can understand a bit more.

Continuing from what you mentioned, Aujan Group holding is a diversified holding holding company. It has its origin more than 100 years ago in Bahrain. It is active in a wide range of industries including fmcg, hospitality, real estate, packaging materials within the Middle east and Africa region. So basically in The FMCG it is, it manufactures Rani Barbican and Vimto brands of juices. It has a joint venture with the Coca Cola company and in the hospitality and real estate business it manages is a number of hospitality units not only in UAE but also in Africa in a country called Mozambique whereby it has partnerships with the Radisson Group, with the Anantara brand and also with the Minor group and in UAE it has arrangement with the Oberoi in the uae. So that's a little bit of a brief about the background of my present.

Organization and the treasury team. You know what's the, what are the key challenges for you guys as well? So it sounds like a very healthy group with lots of different interests. Is it the managing the relationships within those different emerging countries, emerging economies, if that's the right way to put it. Or what are the key challenges for you guys as a Treasury team?

I joined Alger Group at a time when the economic condition was not really very good and essentially we had to make sure that the business from a Treasury perspective is managed very well. Well, it had a some certain financings in place but essentially it was nearing its maturity and there were need to sort of manage it effectively. So basically the FMCG business was needing for cash and refi was supposed to be done because of the maturity profile was coming here. So that refi was done in 2019. That was for the FMCG business. Then the real estate and the hospitality business had also certain debt, debt on its books which was also coming to its maturity and a refi was required. So we work towards with the relationship banks to raise a 12 year financing essentially stretching the cash flow to ensure that the loan obligations are met effectively. Besides this, there are repatriation challenges of cash from jurisdictions in Africa where again similar to India in my experience with Nalco where challenges or restrictions from the central bank, certain regulations to be followed for repatriation of surplus cash from jurisdictions like Mozambique, Zambia and South Africa which also had to be managed and made sure that repatriation happened with all the necessary approvals in due time.

And you talked again? We talked. You've got a team of four there. You know, how do you develop and grow them? What's your ethos around managing those guys, sort of mentoring them if that's the right way.

What I would say is that one of my primary focus to sort of create and lead a winning team is that the treasurer must always believe in V and it's not an I. Right. So that's always my primary focus and I try to make sure that we all work together as a team during difficult times, during good times, at all times, to make sure that we deliverables are achieved. So I would say is that because of this approach, because of this concept that I firmly believe in, the Aujan treasury team was awarded the corporate treasury team in the ACT Middle East Treasury Awards in 2019. It was the highly commended award that was provided or recognized by the act in 2019. So far as development of the team is concerned, I think the primary objective would be to sort of make sure that they do whatever they are required to be done. It's not absolutely essential that we need to dig down their necks at all times, but just to make sure that they understand their role, they know what they are required, what is required from them by the organization and from me as the treasurer to make sure that, that they deliver what is expected at the right time. I think that's very, very important. We have to give the team the flexibility, right, to make sure that they have ample flexibility and freedom to move forward, but to ensure that within the overall framework that we all work or require to work.

How do you do that? Do you try and remember back to when you were at their levels or what's the sort of way? How do you do that?

What I would say is that yes, I do remember back to the level where I was, I mean a finance guy at that point of time because from a Treasury perspective, I've been 25 plus years as a treasurer so I would rather step back and look at the finance roles that I have done and interlink, of course with Treasury. So what I would see is that it is absolutely essential for the team to sort of discuss, have an open session, understand what is required of them and if they are facing any issues, they are free to discuss and trash things out. Because at the end of the day discussion and openness is very, very important for a successful team to perform, whether it is finance or whether it is treasury or any other function. So I would say it's interaction, cooperation, working together during thick and thin is all that is required any organization or for that matter any team to perform effectively.

What I did was recently on a panel and we talked in particular about how the communication has between the treasurer and. I've heard a stupid comment before. They said, oh, the treasury analyst, now their zoom window is the same size as the assistant treasurer. So now they can have the equal voice. Well yeah, they can have an equal voice, had an equal voice before, but actually the job they did was different. To an assistant treasurer, to a Treasury assistant, even though there's still communication going on. But one of the things the treasurer commented on that they were was much more back and forth and there was much more interaction through the pandemic from working from home through all these things. Have you found that that sort of increase with you and your team and organization or was it similar before? Or what's the new way of working for you guys?

I think I would see is that with the onset of pandemic in March 2020, we were required to work from home. And basically I would would say is that it has been no different from working in the office during this difficult times. We kept touch with each other through calls, even video calls via Microsoft Teams or blue jeans, whatever, to make sure that we remained in touch and focused on whatever were the requirements. And the requirements were much more than what was earlier, before the pandemic. Because things really sort of took a different turn when Coronavirus pandemic set in. And I would say is that with the performance of all the teams and remaining in touch, not physically, not personally, but via technology has definitely made sure that we were never apart during this.

Time with that technology. And you know, moving on from sort of outside of your role sort of thing. I know that you've talked, we talked before about really making sure that, that the organization is getting value from you. And the way that you view treasury, taking that aside, is technology. Do you think the biggest thing coming down the line for treasury and things or what do you think are the biggest challenges, if you like, I would.

Say technology is very important for any function, whether it is finance or even treasury, which is a subset of finance. So I would always say is that we need to sort of look forward to sort of automating, use the technology as much as we can. And that scene sort of clearly highlighted that with technology, we remained in touch when we were working from home, right? So definitely technology is very important. We need to automate our processes, create systems and workflows to ensure that the processes are not becoming challenging, but are smooth to operate even when we are working remotely. So far as my experience is concerned, TMS implementation, SWIFT implementation, with all that experience that I have, is definitely a very valuable proposition for any organization. So I would say for all organizations, they should look at it and take a serious call now to sort of move ahead with these sort of technological changes. Because at the end of the day, life would become very simple during these challenging times times or work from home situations.

When you say it's sort of just going into that technology piece, you know, what are you guys as an organization thinking is next for you? Is it the blockchain? Is it, you know, different things that are happening or what's the situation?

I would say is from our perspective, our organization's perspective, we do not want to be too ambitious because at the end of the day, first of all, we must take time for the business to stabilize. So rather than embarking on ambitious things at the moment, it is rather better to stay, have your foot firmly on the ground and make sure that the various treasury operational processes of online banking, etc. Those things are developed with all banks so that you avoid the need for any manual interface with the banks or having check signs or sending manual transfer instruction. So that was automated and that is being fully automated now. And the pandemic has made sure that we had to do that without any exception.

What other things have you found that the pandemic has impacted you guys specifically? You know, what are the other challenges? You know, we've got the communication, we've got the development of the technology, making sure all that works. Are there other things that you think that you've noticed over the past sort of six to nine months sort of thing that have really impact, what, six months that really impacted you guys?

What I would say, from a business perspective, yes, right. Because from the lockdowns that happened across regions, there has been slower offtake so far as the products are concerned. Number two is that cash collections have also slowed down. Challenges in depositing cash with the banks working shortened hours has also added to the complexity. So basically these are a few of the challenges that have been being faced. And with the lockdowns opening up, people are working to ensure that these challenges are overcome in the. To the best of the abilities of everybody. Because these challenges were not there earlier, before the pandemic.

Do you find that We've got the. Working from home, we've got the, you know, people have talked about the hours that people are working and things like that. This is one of the questions I was talking and I've talked to a number of treasurers and treasury professionals, actually all levels that, okay, people aren't commuting, people are saying, oh, this is great, blah, blah, blah, you know, don't have to commute. But actually it seems like their working day, maybe they were leaving the house at half seven in the morning, getting home at half seven, and that might be with an hour and a half commute. So they'd be 9 till 5:30 sort of thing, and getting back and things like that, but everyone's then working from home. But it seems that when I've spoken to a number of people, they said, yeah, but my, you know, I don't have to do the hour and a half commute, but now I'm online for a breakfast stroke, eight o' clock and, you know, I'll still be answering the odd email at 8 o' clock at night. Do you find that the working day has increased a little bit? You know, maybe for you as a treasurer or in general for the team, you know, is that something that you've been aware of? I know we didn't discuss this before.

So I would say yes, because it definitely has increased not only for me, but for the other people in the team. And I would also assume that has been for the finance team as well. And it is still continuing because, yes, I do agree that the working, the commuting time is not there anymore. So hour, hour and a half is now added on to your work time. And I would say the next thing is that because of the challenging environment that has been created because of the pandemic economic conditions that have developed across various jurisdictions, across various countries in which the business operates, I think this is the new normal till we have some resemblance of, of an economic turnaround. May not be this year, maybe next year, but I would definitely see that it is something which is definitely for the benefit of the organization because if people try to make sure that whatever is required from them is done at the right time, even if that meets that means a little bit of extra work, it definitely would help the business to turn around. I am definitely of the week you that yes, we in treasury or we in Finance will not be able to sell our products in the market. But whatever we can do at our end, it definitely will lead to the growth and prosperity of the organization that we work for.

Yeah, it's an interesting one because I think in common with some of the treasures I've talked to, you know, we, as a recruitment company, we've, you know, our hours have got longer, but, you know, working from home, but then there's also sort of, you know, doing calls in the evening and being more open to it because we've had to. And. But in some ways I think we need to backtrack on that because I think it's unfair that it could become the new norm exactly as you described there. You know, you want to keep a balance because otherwise, you know, you risk burnout, you risk all those other things. So I think keeping, as you say, that sort of balance is a, is a key thing. I mean, you know, as we come out of this now and we're sort of recovering, if you like getting back to normal, let's talk about that with you and with the, with treasury going forward. Where do you see it going from here? You know we're going to, we've got you know another five, ten minutes of the show but where are you seeing the future of treasury and you know what do you think is coming up people? You know we're all on virtual conferences. Hopefully next year will be to real life conferences and meeting people. But you see all the headliners saying oh this is the next thing coming on. What's the next thing do you think?

What I would see is that the realization from this work from home is that you can manage all activities even if you are not meeting face to face. One of the primary role for of a treasurer is obviously relationship management and you need to maintain touch with all your bankers. Right. Previously what used to happen is that the bankers used to drop by our offices or used to visit them and that's how the relationship developed. But now with this pandemic with work from home it has been restricted initially to phone calls and definitely through blue jeans calls or Microsoft Teams call. I would say is that this probably could be a new norm. Physical meetings probably are things of the past. If this pandemic continues for longer period then I think this is the new norm that we have to live with that we have to do the those video calls to make sure that we are in touch with our relationship banks across functions, across jurisdictions. The other thing I would say is that we are operating across jurisdictions. I have banks in UAE and I also have banks in Saudi Arabia. Now obviously if it was good old times I could arrange for a trip to fly down from Dubai to Saudi Arabia and have a face to face meeting with the bank. Then obviously it had its own costs, it had its own planning to be done, etc. Etc. But now I would say the new normal is that probably the cost can be avoided and you can always jump into a call much more frequently and maintain your relationship in a much more stronger manner. Yes, I do agree that the physical touch probably is lost because we cannot shake hands anymore which we used to do last year in sweat but at least I mean you get used to the new norm. So I would say is that that is something which probably businesses and especially for people that are still treasury would have to get used to. And secondly I would say is that as I mentioned earlier as well. The economy continues to remain challenging, so we have to be resilient. We have to make sure that we demonstrate perseverance to ensure that the business is supported in all manner and form by treasury, to ensure that all needs or all loopholes in the business are rightly filled in.

I just want to pick out something you said in the first days there where you talk about having to talk to your banks much more and having to be human, you know, have more, you know, maybe you talk to them once a month. Now it's four times a month, you know, it's a weekly thing, I think. Certainly, I don't know if you saw that as well, but I think you're right. I think there's. There's more touch points and there's more, you know, hopefully you can go back to getting on, do your job a bit more, meet them once a month and that's it, you know, speak to you next month. So we're gonna put your details, your show, your LinkedIn profile, rather in the show notes, and people can look back and you've got this rich career, as I say, making the moves from India through Saudi, then into Dubai. If someone's looking at you and, you know, they say, oh, actually I'd like to have a similar background to you. What are the tips you perhaps give to the people? What are the tips that you have just in general, maybe to your team and things like that. What do you think?

I mean, see, in the beginning is that qualifications is sometimes important, sometimes it is not. So for a recruiter or for a hiring manager, he must see through the candidate, I would say is that with my profile of a decade in India, a decade in Saudi Arabia and then on in Dubai, I will say that I'm really thankful to the hiring managers, to the CFOs who had hired me to sort of deliver what was required or expected from me. And that has definitely added value to the organization. So I would say that is something which is very important. You need to make sure that during your interview, you try to focus on what you can do and make sure that you deliver those that you think or that you said you would do if you are hired. And that can only come when you have that can do attitude. So I would say is, irrespective of your qualifications, irrespective of your training, irrespective of your experience, if you have the can do attitude, you would always end up in a winning role. Any function, whether it is finance, treasury.

Or that matter, any other points or is that where you want to wrap.

Up, I would say is another thing which I consider my. I mean I personally follow it, I followed it and I will continue to follow it is that there is no stopping of learning. Treasury is an evolving profession, right? It changes daily, monthly, yearly. So you need to be abreast of the various changes that are taking place in the Treasury. You may not be having the full in depth knowledge or the time to understand, but try to make sure that the team that are working with you remain abreast of everything. Because at the end of the day it is for their own development. And so far as myself or the creationary skill concerned, I always believe that I always have a to do wish list which I don't think should finish at any point of time. It should be a never ending because. Because of the treasury profession being so. I mean open to new ideas, new changes, you should be able to deliver something new or something different in the coming years.

Yeah, right. I mean amazing, you know, great walk through there with you know, RJ's background and all the way and moves he's moved. As I said, if you want to connect with him, we'll put his LinkedIn profile in the show notes. So you be part of the connect. You know, have a great connection with a great treasurer which is great. All remains for me today is I said thank you for your time today. I think in great episode we rocketed through. We got some good views from you and you know, I think some good views for the future as well. So thank you for your time.

Thank you very much Mike, really appreciate pleasure.

Thank you sir.