Innovation In Action
For Cytec Industries
Optimizing payment channels to leverage financial advantages
Cytec Industries Inc. is a global specialty chemicals and materials company with 6,000 employees worldwide and annual sales of USD3.5 billion.
Like most companies, Cytec is keenly focused on maximizing working capital. Even before the current environment of depressed sales, increased operating costs and illiquid capital markets, Cytec's treasury developed a sourcing strategy supported by innovative, secure payment channels to defend and enhance its bottom line. Having worked with Citi on a successful purchasing card program and a global travel and entertainment program, Cytec turned once again to Citi for advice, technology and analytics, forging a comprehensive partnership across its entire spectrum of payments — one that would manage payment streams to maximize cash flow and working capital. Cytec was also keen to hear what options Citi would propose for optimizing the continued growth of the company's purchase card program.
Citi reviewed Cytec's full accounts payable file and identified the most advantageous payment method for its various spend categories. In many cases, Cytec was able to change its payment method in order to achieve increased efficiencies and cost savings. According to Gary Kawka, Cytec's Assistant Treasurer, Americas, "Payments can be used to deliver additional value, be it strategic, financial or operational. We approached Citi to help our organization move from thinking of payments as individual products to more of a process. We are now optimizing payments, benefiting from the dynamic between time-to-procure, remittance date and settlement date." Cytec's knowledge of its own procurement process, coupled with Citi's detailed analysis of payment strategy options and solutions to facilitate adoption and implementation, has been essential to the ongoing implementation of a buyer-initiated purchasing card and a supplier finance program.
Cytec is in the final stages of implementing the solutions identified during the optimization process and is poised to accomplish its working capital goal and also improve the strength of its supply chain, recruiting new suppliers as it extends to them the value-added benefits of supplier finance. Citi colleagues continue to meet with Cytec regularly to address training and implementation requirements. Ongoing systemic payments reviews continue as well, identifying opportunities to further increase payment efficiencies by choosing payment channels that offer the best financial advantages for Cytec.