IAFEI Quarterly - 32nd Issue

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Press, Journal Article
28 The Treasurer March 2016
investments, preferring not to give them
the beneit of the doubt��
Emile Raymakers, group treasurer
at Dutch animal feed giant Nutreco,
says the company, which was last
year acquired by privately held Dutch
conglomerate SHV, is well placed to
ride out shocks to EU economies.
“Nutreco is quite spread out across
the world, and our most important
markets are Canada, Norway and
Spain. We’re also in a sector that’s less
vulnerable to economic downturns –
in ���� we were only marginally afected
by the crisis.”
What if the UK were to vote to leave
the EU in the event of a referendum
on the subject? French prime minister
Manuel Valls paints an apocalyptic
picture. He warned delegates at Davos
that European civilisation itself would
be under threat were the UK to go it
alone. “It would be a tragedy,” says Valls.
“Europe could lose its historical footing
and the project could die quickly. Things
could fall apart within months.”
In its latest forecast, CEBR says: “A
Brexit is still very much a real risk and
while the long-term implications of this
are debatable, the short-term ones are
clearly going to be very negative.”
What impact would a Brexit have?
Treasurers appear less agitated by the
risk of Brexit, and it’s either because
they simply don’t see it happening,
or else because they don’t reckon on a
major impact for their business. “We’re
not scenario planning around Brexit,”
says Raymakers. “I am not aware of it
being on the board’s agenda.”
Sridhar Ramamurthy, group
treasurer at Unilever, says he is not
the right person to ask about the
possibility of either Schengen being
scrapped or Britain leaving the EU.
�We operate across the world� �es,
Europe is important, but it is only
about 25% of our business. The more
important thing is to ensure that
Unilever, as a company, is prepared to
respond in an agile and lexible manner,�
he says. “Producing thousands of pages
of scenario planning will keep the
intellectual juices lowing, but it
“Producing thousands of pages of scenario
planning will keep the intellectual juices
flowing, but it makes more sense just to
prepare the organisation to be agile”
makes more sense just to prepare
the organisation to be agile.”
To be sure, there are speciic policy-
driven headaches for treasurers.
Energy multinationals, for example,
are concerned about the lack of a level
playing ield in subsidies for renewable
energy across Europe, especially since
UK energy secretary Amber Rudd
announced a 65% cut in such subsidies
in December, and since Germany
decided to close down all its nuclear
power stations. Some countries like
�pain have �pretty much turned of
that tap” [of subsidies] as a result of
post-crisis, austerity-driven cuts, says the
group treasury of a utility giant, whereas
in Germany renewable subsidies from
feed-in tarifs are expected to remain at
about €25bn a year or €600 per German
household. The source says: “It’s blowing
around a bit, so you can’t make long-
term decisions.”
Priorities for treasurers
Volatility in commodity markets,
the oil price, FX rates and continuing
uncertainty about when non-US interest
rates will rise remain front-of-mind
issues for treasurers, especially after an
IKON IMAGES/GARY WATERS
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