Executive Summary

As a partial requirement of Internship program, the report Development of an

Efficient Treasury Management Model for Unilever Bangladesh has been prepared.
During the internship period operation, process, policies and activities of Treasury
Function of Unilever Bangladesh Limited have been studied. In order to benchmark
practices, different aspects related to Treasury management of Marico Bangladesh
Limited and Berger Paints Bd Ltd has been studied.

Unilever Bangladesh Limited is one of the largest FMCG operating in Bangladesh

whose primary activities is manufacturing and marketing of fast moving consumer
goods. The Company has a heritage of over 48 years. Unilever started its onshore
operations in Bangladesh in 1964 when its soap factory was set up at Chittagong. .
It is a leading company in home, personal care and food products, continuously
introducing new and world-class products for the Bangladeshi consumers.

Treasury is a sub function of finance under Controllers Department the function is

broadly aimed in managing risk and providing service to other functions. The
department works closely with global and regional counterparts for broad
framework like adhering to policies as well as day to day transactional activities. At
global level, capital structure of each Unilever entity, funding decision, risk exposure
with each bank, risk management, liquidity management etc is handled. Thus the
local treasury team has to follow numerous global mandates and recommendations.
Exceptions need to be approved by the global team, since due to local reality
numerous global mandates may not allow workable solution.

As mentioned earlier, Treasury in Unilever operates as a service delivery function

and not as a profit centre. Its primary task is to minimize risk. From global treasury
bank relationships are defined in term of what kind of service/products that can be
availed and in which banks Unilever will do business with. This is a part of risk
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management. From local level banks exposure is monitored and it is actively

maintained that any point in time exposure does not exceed the limit set for each of
the respective banks. Other than this, local treasury team actively monitors risk
exposure coming from foreign exchange and accordingly hedging is done.
Additionally team performs cash
Unilever has 126 distributors located across the country. The cash collection process
is unique and is quite different from peer companies. Unilever sells on zero credit
and only dispatches on cash realization. The system integration is high level, which
connects distributor to Unilever and to bank. The flow of data minimizes risk and
possibility of manual error. The data flow is real time. There is minimum cost to
Unilever. In terms addition to this the collection bank is offering credit facility for
Unilever purchase to distributors at a cost which is lower than the market interest
rate. IT integration and distributor financing product is putting UBL way ahead than
peer companies. It has been observed that for all the 3 companies, the cash
realization from instruments like Demand Draft /Pay order takes a long time (2 to 8
days). In order to minimize UBL can start greater leverage on direct debit.

UBL has few hundreds of vendors - some are regular whereas others are infrequent
or one times. Payment process can be categorized under foreign payment and local
payment. Foreign payments are largely for import of raw material, capital
machineries, semi finished goods etc. These are pai through normal letter of credit
process and it is quite comparable to peer companies.

In case of local payments, again there is integration with the payment bank. From
UBLs ERP system payment files are generated, approved by signatories and data
file flows to the payment bank. Payment bank prints the instruments and delivers to
UBL premises, which is later on delivered to the vendors. UBL is running a little
short on electronic transfer to suppliers account. It is thus recommended that is
least for recurring vendors electronic transfers to be used.

Acknowledgement
In order to complete this internship program, I have received immense help and
support from officials of Unilever Bangladesh Limited, Marico Bangladesh Limited &
Berger Paints Bangladesh Limited. I have been thoroughly guided by my internship
supervisor Dr. Jawadur Rahim Zahid, Professor at Institute of Business
Administration.
i)

Finance Controller: Mr. Ahsan Habib, Finance Controller have been

interviewed on several occasions, to understand Treasury Operations and

ii)

overall finance overview

Finance Shared Services: Mr. Shahadat Ullah, FSS Manager, have been
interviewed to understand the payment process and to understand the

iii)

requirements of suppliers
CD Finance: Mr. AKM Amdadullah Bhuiyan, Financce Executive, CD
Finance, has been interviewed to understand the collection process and

iv)

how it is related stock dispatch

Marico Bangladesh Limited: Mr. Faisal Siddiquee, Sr. Executive, Treasury,
has been interviewed to understand the end to end treasury operations

v)

and thus benchmark with UBL.

Berger Paints Bd Ltd: Mr. Masud Nomani, Assistant Manager of Berger
Paints Bd Ltd has been interviewed to understand the end to end treasury

vi)

operations of the Berger BD

Dr. Jawadur Rahim Zahid, has helped in selecting the topic, and helping in
building the framework. Due to his help I have been able to complete the
report.

List of Acronyms

BEFTN
BPBL
BRAC
CD
CRS
CTG
DD
DHK
DMS
ERP
FMCG
FSS
FX
G1
G2
GTO
HSBC
IFG
IT
LC
MBL
MICR
MIS

Bangladesh Electronic Fund Transfer

Network
Berger Paints Bangladesh Limited
Bangladesh Rural Advancement
Committee
Customer Development
Continuous Replenishment System
Chittagong
Demand Draft
Dhaka
Distributor Management system
Enterprise Resource Planning
Fast Moving Consumer Goods
Finance Shared Services
Foreign Exchange
Group 1
Group 2
Global treasury operations
Hong Kong Shanghai Banking Corporation
International Funding Group
Information Technology
Letter of Credit
Marico Bangladesh Limited
Magnetic ink character recognition
Management Information System
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Non CRS
OpCo
PO
RM
SCB
UBL

Non Continuous Replenishment System

Operational Company
Pay Order
Relationship Manager
Standard Chartered Bank
Unilever Bangladesh Limited

Appendix: List of Tables & Charts

1.
2.
3.
4.
5.
6.

Chart 1: Organogram of Treasury Sub Function

Chart 2: Global Treasury Structure
Chart 3: Data Flow in Collection Banking Structure
Chart 4: Collection Bank A/C Infrastructure
Table 1: Location wise Clearance Time for MBL
Table 2: Average Clearance Time for Berger Paints Bangladesh Limited