What are the activities of your company?
Brachot-Hermant was founded in 1901 and is a leading producer and wholesaler of natural stone in Europe. The family business owns quarries in Norway and France, and processes natural stone in four ultramodern sawmills in Belgium, Poland and India. Brachot-Hermant is responsible for the wholesale activities and distribution through various subsidiaries. The "Stone Gallery" showroom in Deinze is one of its kind in Europe. Since 1980, the company has expanded vigorously through the expansion of branches and covered depots in The Netherlands, France, Great Britain, Germany, Poland and Italy. The group is number One in Belgium and ranks in the top 3 of Europe. Annual turnover is EURO 70 million.

Which objectives does the pan-European treasury management meet?
The expansion of Brachot-Hermant has an impact on the management of the financial means of the group as a whole. The available liquidities must be keyed to the needs of all entities. The company is pursuing international dimensions with its quarries, sawmills and distribution network on the one hand and customers ranging from the United States to Australia on the other. The local branches each have their own individuality in their country of establishment. Liquidity management is done from the Head Office in Deinze (Belgium).

At this moment, the Brachot-Hermant treasury management coordinates four countries. This formula aims at optimising the available liquidities, the drastic reduction of interest costs and the restriction of the number of international cash transfers.

Which pooling system did you retain and how does it work in practice?
Each subsidiary in the countries involved - Belgium, France, The Netherlands and Great Britain - hold a bank account at a local bank to allow depositing of cheques and cash revenue. Cashing via transfer is deviated to Fortis Bank accounts. The notional pooling uses these or complementary Fortis Bank accounts on the name of the parent company and/or the subsidiary.

Notional pooling was opted for after an in-depth analysis in cooperation with Greet Vermandere, Relationship Manager, and Paul De Clercq, Global Cash Management. This system is juridically sound, transparent, reliable and administratively simple. In contrast to target balancing, the positive and negative balances are balanced without any bank transfers. This leads to a significant improvement in efficiency and lower bank charges. The interest is calculated on the cumulated balances of the participating accounts.

Before we changed to notional pooling, we used a complex cross-border payment system with a multitude of bookings, bank transfers, long expiry dates and means that were not optimally used. Fortis Bank provided the structural conversion to an easy and surveyable liquidity management on a European scale.

How do you rate the functioning of this liquidity management system in Europe?
The notional pooling system is simplicity itself and therefore not really spectacular at first sight. However, the underlying structure is well thought-out. As yet, the harmonisation of regional financial and fiscal legislations remains to be done. Notional pooling, however, offers Brachot-Hermant the certainty that all applied techniques and operations fully comply with the different local legislations and regulations. We have therefore long passed the point of neutralisation of debit balances in one country by credit balances in another country.

The system allows us to combine the majority of the group's liquid means in the pool. The immediate availability of liquidities in four countries significantly increases our financial scope. Unexpected commercial purchase opportunities or urgent expenditures in a certain country can be solved immediately without confronting the company with higher interest charges on debit balances on current accounts.

Through multi-currency pooling, we furthermore benefit from higher interest rates on e.g. Pound Sterling, avoiding the necessity to exchange pounds to euros against a less favourable exchange rate.

Brachot-Hermant especially appreciate the absolute protection offered by notional pooling against abuse or derailments. The debit situations on the pool accounts would not be possible without a specific credit line or a global Umbrella credit line. In this way, the company retains full control on the accounts and their use.

How easily can you supervise the European cash deposits?
We manage the accounts ourselves from Deinze via Remote Payment Initiation.
An Internet browser with secured access suffices to manage the notional pooling. We use the Internet application for detailed and transparent reporting of the pooling. We calculate the interest advantages on a monthly basis.

Why do you prefer the pan-European Fortis Bank to a bank that is active worldwide?
Cross-border cash management services are not given to any bank. Fortis Bank is active in most countries where Brachot-Hermant established branches. That proved to be only one of the decisive factors. The multidisciplinary expertise of the Fortis team, the availability of the Fortis contacts and the professional work environment provide that typical bank relationship a family business wants.

Brachot-Hermant chose for Fortis Bank despite the offer of a financial competitor. The Fortis Bank price setting is most attractive. Due to the fixed cost structure of the pooling system, the introduction of a parallel pool is unnecessary.

We rate the performances of the notional pooling twice per year with Fortis Bank. To this end, we use objective criteria such as the comparison of the profitability of the pool with the costs.

Can you summarize the main advantages of your cash pooling construction?
We can summarize the trumps for Brachot-Hermant as follows:
- lower interest charges,
- higher availability of liquid means,
- time-saving,
- surveyable management,
- less bank transfers,
- better management of currency positions,
- lower financial charges,
- lower bank charges,
- less administration.