Agri-knowhow and
triple-A -
POTENT COMBINATION
WHAT'S NewS Issue 5 May 1997
working relations
3
One of our primary cliënt focus groups is multinational food and agribusiness
clients. Cargill is one of the world's greatest F&A corporates operating across
the globe and a cliënt to many or our international offices. Is there a difference
in this kind of customer's needs? And do we have the full range of services and
products to meet them? Former Cargill Nederland and current chairman of the
Royal Dutch Grain and Feed Trade Association Rudolf Hoeffelman has answers
to this and other questions.
Rudolf Hoeffelman:
'You can add value
by becoming a
financial partner.
Hoeffelman may have retired after 40
years from his top job at Cargill but he
remains an extremeiy busy man. His tight
Schedule leads him to suggest a meeting at
the airport where he is quick to emphasize
that he does not speak for Cargill, but
^olely as someone who has many years of
"experience in our core business. Given his
wealth of experience, the first question has
to be: is our ambition to become the top
food and agribank worldwide a realistic
goal? 'You certainly have the potential,' he
says. 'You have an agri-stamp. In other
words, you are perceived as an agri-
specialist. Then there is the important
financial image through your triple-A
rating. That combination is potent in agri
business markets, both local and global.'
CASH-RICH
While this would appear a positive
statement, Hoeffelman immediately adds:
'But are you positioned? Can you reach
out for that potential? As someone who
has worked for a global company, I'm
speaking from that perspective here. First,
a global corporate does not mess around
with smaller banks. We deal with the
major players, although I should say that
fairly substantial borrowing business is
done with Rabobank. But if you look at
Cargill, for example, it is a cash-rich
company, so borrowing and long-term
debt are not exactly high on the wish list.'
ICM - CRUCIAL PRODUCT
What is a priority for global corporates are
products like international cash
management, an instrument that (as yet)
we do not offer. 'The American banks were
quick to develop this product,' confirms
Hoeffelman, 'They saw a market and the
advantages to major players. It enables you
to save considerable amounts of money
through reduced human resources in your
own organization, through grouping
treasury functions together and through
netting. If banks want to deal with global
clients proficiently, then they have to offer
international cash management. It is a
must.'
NICKELS AND DIMES
Hoeffelman agrees that if you're providing
ICM then your foot is firmly in the client's
door when it comes to cross-selling. 'ICM
is clearly important, especially for large
corporates, but it's not the only way you
can distinguish yourself as a bank,' he
continues. 'Obviously, the price has to be
competitive. But you can add value by
becoming a financial partner. That is
really important. You know, in my
business - commodities - we have a saying
about customers: Today, he's my friend;
tomorrow he's yours for a nickel. With
bankers, the relationship should be very
different. Financial partnership means you
have to come up with financial
engineering, with fiscal structures that can
assist and support the cliënt. Actually, you
have to become part of the company's
financial operation.'
USING EXPERTISE
According to Hoeffelman, there are three
basic factors bankers should keep in mind
in their approach to clients - a trio that
corresponds with key elements in our
customer focus stratety. 'The first is to
concentrate on the relationship in general,'
he says, 'just by presenting potential
services or ideas for structures in a more
accessible, client-friendly way will
improve Communications significantly and
earn you points. Try to behave like a
partner. The third factor is expertise. You
have an edge because you not only have
banking and financial expertise to offer,
but also F&A know-how. By the way,
mergers and acquisitions advisory services
is an area where you can really add value
through your F&A network around the
world.'
DIFFERENT WORLDS
These three points are not all equally
applicable to global multinationals.
Hoeffelman argues that the partner aspect
is less relevant in giant corporates. But he
does see all three as crucial in building
long-term relationships with small and
medium-sized businesses of which any one
could potentially be a multinational of the
future. Hoeffelman is convinced that the
current trend whereby SMEs tend to work
with only one bank will change, so it is
imperative that we are in there from the
start, proactively working for that cliënt.
'This is just an observation, but as a
director of a few smaller companies, I am
seeing a trend towards increasing
professionalization. They will soon learn
to bank with more than one bank and that
would be a healthy development. In an
ideal world, you'd have banks fighting
over a small company's business. That's
not a reality, unfortunately - at least not
yet. But even though I would argue that in
this respect, the SME and multinational
market should be the same, they are not.
SMEs have different needs. As a bank, you
should position yourself to look at both
these segments separately. Multinational
corporations and medium-sized nationally
based companies - they're different
worlds.'
AGRI-KENNIS EN
TRIPLE-A STERKE
COMBINATIE
Een van onze belang
rijkste doelgroepen is de multinationale
F&A klant. Zijn er verschillen in de
behoeften van dit soort klanten? En hebben
we genoeg producten en diensten om die
behoeften te bevredigen? De voormalige
Cargill Nederland topman en huidig voor
zitter van de Nederlandse graanvereniging
Rudolf Hoeffelman beantwoordt deze en
andere vragen.
