Trust in a sustainable relationship at Gasunie NV
The cash must flow as smoothly as the gas
Since the start of the economic crisis, many organizations have placed client friendliness high on their agenda. Marketeers know that it requires 70% more effort to acquire a new client than to retain an existing one. Relationships are formed with good clients; and those with whom you form relationships become ambassadors. Zanders cherishes its ambassadors and, consequently, invests in relationship management, quality and personal contact. One of these ambassadors is Nederlandse Gasunie NV in Groningen.
While a February storm harasses Gasunie’s prominent offices in the Groningen, an almost serene atmosphere of calm reigns inside the colorful and attractively designed building. Comfortably seated on the 14th floor, Gerard Bakker, the treasury controller of Gasunie, and Zanders consultant Ivo Postma, explain how Gasunie’s good relationship with Zanders began.
In 1959 the Nederlandse Aardolie Maatschappij (NAM) discovered natural gas in Slochteren, in the province of Groningen. Production started in 1963 and the Nederlandse Gasunie was incorporated as the sales organization for Dutch gas. Within 10 years, Gasunie had built an enormous gas transmission network, after which almost all Dutch households were connected to the gas grid. Due to the liberalization of the European gas market, the European Union drew up guidelines for the creation of independent gas transmission networks. On 1 July 2005, the gas trading company Gasterra was separated from Gasunie. Since then, Gasunie, which is wholly owned by the Dutch government, has been involved in the transport and storage of natural gas. In 2009, a sales volume of EUR 1,669 million was realized.
Order in the treasury
It is essential for the treasuries of multinationals to be well organized, as Gerard Bakker explains: “It is my job to ensure that the cash flows as smoothly as the gas. Residual resources must be put to good use and if there is a deficit, more resources must be brought in. Of course, I don’t do that alone. I draw attention to positions of deficit and surplus and my colleagues decide whether actions need to be taken on the money market, after which I review any actions carried out.” Regarding the financing of any large investments by Gasunie itself, bonds are issued on the capital market.
In the 1980s, it became possible to computerize the operational processes. Gerard Bakker notes: “Gasunie was one of the first Dutch companies working with an integrated system. At the time, the SAP system only offered a general ledger environment and a few development modules. It was not until the end of the nineties that SAP developed a treasury module.”
Choosing an external party
At the start of 2000, Zanders was brought in to maintain the treasury package. Gerard Bakker says: “Prior to that, the maintenance was done by our own IT people. In the nineties, IT people regularly changed jobs and it cost us a great deal of time and money to keep inducting new staff. Then we came into contact with Zanders. At that time, Zanders was a small – still developing – company. However, it was the only company in the Netherlands that was able to maintain a treasury package.”
Consultant Ivo Postma says: “In 2002 we started reorganizing the administration, so that the general ledger and treasury could successfully function together. After that we took over the management and maintenance of the systems ourselves. As we have been an official SAP special expertise partner for treasury functionalities since 1998, we always have access to accurate information, enabling us to advise and support our clients – in fact our ambassadors – in the best possible way.”
“The cash must flow as smoothly as the gas”
A project with several parties requires different financing. In 2005, due to the increasing need for natural gas, Gasunie developed, in collaboration with the world’s largest tank terminal operator, Koninklijke Vopak NV, a storage and transshipment company: Gate terminal (Gas Access to Europe). Bakker points out: “Gate terminal is currently building a liquid natural gas (LNG) import terminal on the Maasvlakte in Rotterdam. Imported LNG will be converted into gas there and brought up to the pressure required for it to be delivered to the Dutch gas transmission network. We expect the terminal to be fully operational by the end of 2011. The total project costs have been estimated at EUR 800 million.
A project involving several parties naturally requires a type of financing that differs from corporate financing. Normally we issue bonds, which we usually sell on the capital market. In that case, Gasunie provides the security. The security of a project is only offered by the project itself, which requires specific financing. Zanders has given us good advice about the structure of such financing.”
Strict risk audits necessary
In Gerard Bakker’s office there is a Bloomberg terminal continually churning out real-time financial data about stock market prices and news tickers about market parties. Bakker says: “Zanders has built a brilliant application for this which works at night. All the essential rates and prices are extracted from the system and, subsequently, presented in the SAP market data tables. When I arrive in the morning, I immediately check the risk position of our counter parties and see whether any action is required.” Ivo Postma adds: “Since the financial crisis, collateral management has been a hot item. We now know that the credit worthiness of an apparently safe counter party can collapse without warning. Consequently, it is important for companies, investors and asset managers to protect themselves by means of strict risk audits. Given good collateral management, counter party risks can be limited.”
Certainty, trust and continuity
Gasunie receives good and accurate advice from Zanders, according to Bakker. “The cooperation is extremely flexible and effective. You communicate from a distance and if there is a problem they can log into any part of the system. We first started working with Zanders as it struck us as being a professional organization; it offered certainty and continuity. Their people had know-how – know-how that was guaranteed and has already proven itself. It takes years to build up a good relationship, as you are, in fact, giving away some control. Eventually, it all boils down to trust; and we have that.”