How would you present your group in a few words ?
We are a global specialty chemical company headquartered in the United States (Richmond, Virginia) serving customers in more than forty countries.
We produce fine and polymer chemicals and have manufacturing locations in France, Germany, the United Kingdom and the United Sates.  We have regional treasury centers in the United States, Europe and the Far East with European banking operations in Belgium, France, Germany and the United Kingdom for ten different legal entities.

What are Albemarle's treasury needs ?
From a Treasury perspective, our ability to utilize and manage our multiple accounts and multiple currencies in an efficient manner is very important to the Company. 
We are able to balance our currency needs through a pooling agreement for our Europe accounts through Fortis Bank. This allows us to utilize the benefits of having excess EUR in these companies, offset borrowing positions against the surplus of others, while receiving the benefits of low borrowing rates and high investment rates. 
In addition, we are able to settle the majority of our subsidiaries needs for currencies in house; thus, reducing the amount of outside foreign exchange transactions. 
The monitoring of our European accounts is done through Fortis Isabel both here in the US and in Europe on a previous day basis. 
In addition, all payments are processed through Isabel allowing for a centralized location for payment processing and reducing the amount of time and staff needed for these transactions.

How important an issue is cash pooling for Albemarle ?
Cash pooling is very important to our Treasury strategic objectives of maximizing the use of our cash, streamlining our operations by reducing transaction handling and centralizing cash management. 
Cash pooling along with the Fortis Isabel reporting system and our Fortis European payment
factory have enabled us meet all three objectives listed above.  Albemarle Corporation is a net borrower of USD with a surplus of Euro.  Our pooling facility has allowed us to compensate USD and Euro balances thus maximizing our interest earnings and minimizing our interest expenses.

How did you come to choose for a pan European provider instead of going for a global provider ?
Fortis Bank was our lead bank in Europe.  We spoke with Fortis along with global providers and explained our cash position and needs. Fortis tailored a plan to suit us as a company and minimize the number of bank accounts and transactions that would need to be processed and recorded.
Our company has a small operational staff in Europe and no coordination center so we saw much benefit in limiting the number of bank accounts and physical movement of funds.  We were not interested in establishing a group of overlay accounts.  Nor did we have an interest in physical converting currencies for pooling purposes only so being able to compensate the Euro for dollars appealed to us.

Target balancing versus notional pooling : a difficult choice ?
The pooling plan was tailored for us by location of our accounts.  We make use of both the target balance and notional pooling concepts. Where it was practical, we made use of our current accounts in a notional pool (Belgium and the U.K.).  If this was not practical because of in-country
considerations, we then used a target balance structure.  Our German and French accounts are target balanced to the Netherlands and these Netherlands accounts are then included in our notional pool.
All movements of funds are fully automated and we reduce the recording requirements of target balancing through a monthly journal entry rather than recording each funds movement.  We view both the target balance and in-country account balance as one when determining cash requirements..

What are the main benefits of your solution for a US group?
Again we are able to utilize our cash to its best advantage, compensate Euro for USD, minimize our Treasury staff involved in transact ion processing and recording, while maximizing our interest revenue and minimizing our interest expense.
The Isabel system and the pooling allow us to manage the FX exposure of the Corporation on a true global basis, from one central location.

How did you overcome the hurdle of handling different currencies ?
We do not convert currencies for pooling purposes.  Balances are compensated to the Euro equivalent.  However, on a global basis we manage foreign exchange exposure on a corporate level as much as possible.  We then manage each subsidiary's foreign exchange exposure by first looking amongst our group. For instance, our UK company has a surplus of USD collected from customers. A French company needs USD for payments and has a surplus of GBP which they collect from customers.  The French company will buy USD for GBP.

How easy is the monitoring of your European cash positions from Baton Rouge ?
Two key systems allow us to monitor our European cash positions: the treasury software ISABEL and the ERP system SAP. It is the combination of both system that makes our strength.

The Isabel system provides us with previous day balances by currency with a total compensated to a Euro balance. We look at this first thing every morning. This review takes only a few minutes. First, we look at the total Euro balance which we want to be as close to zero as possible to optimize interest revenue (or minimize interest expense) for the pool itself. It is not urgent to cover negative balances or adjust currencies on a daily basis.  Each subsidiary has its own credit position.

We initiate all external European payments through our enterprise resource system (SAP) from our Treasury group in the U.S. directly through the Fortis Isabel system in Brussels.  
Once a month we net all intercompany payments bilaterally and make one payment per subsidary. Any other investments or borrowings are handled by this Treasury group. We have knowledge and control at the corporate level of all cash balances.

After reviewing the balances along with incoming or outgoing payments, we may determine we need to adjust this balance by either borrowing USD or paying down on a previous borrowing of USD.  We might also invest in time deposits.  We look at whether we need to adjust individual subsidiary balances by buying or selling a currency.

Because it is not urgent that we cover balances by currency we are able to time our transactions when they are most advantageous to each subsidiary.

What is the main advice you would give to a US Treasurer confronted with similar problems ?
Talk to your banking partners. Reduce the number of banks you are working with. Describe your strategic needs and requirements.  Find out how they can tailor their systems to fit your needs. Maximize electronic banking. Involve your tax advisors from the beginning. Implement the best pooling system you can envisage and then meet with your bank regularly afterwards to optimize the results. Ask your bank for references.