Company Overview

Fareva is a family-owned business that began in the 1980s. Incorporated in Luxembourg, the company operates as a subcontractor specialising in multiple industries:

• Beauty and household
• Make-up
• Pharmaceuticals and API

With operations spanning 12 countries and approximately 40 entities worldwide, Fareva has established itself as a leader in the contract manufacturing sector through organic growth and intensive mergers and acquisitions.

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The FX Challenge

As Fareva expanded internationally, FX exposure grew exponentially, particularly in USD and GBP. Despite having natural offsets through cross-currency cash pooling at a global level, they needed a more effective local management of currency risk.

"Before Kantox, we didn't have a super complex FX program. We had natural offsets at a global level, but not at a local level. That's why we started to assess and think about a more complex process." - Thomas, VP Group Treasurer

• Decentralised organisation

• Manual processes - The treasury had limited automation in place to help with the hedging and trading phase of the FX workflow, relying mainly on Excel spreadsheets as a consolidation tool and trading via phone, which reduced operational efficiency. 

• Lack of visibility - Phone-based trading with hidden bank fees increased costs, and there was a significant lack of visibility into actual FX costs and exposures.

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The Kantox Solution

Fareva needed a solution that would automate FX risk management while accommodating the decentralised structure. After evaluating different options, they chose Kantox for its scalable, plug-and-play implementation, quick onboarding process, streamlined KYC procedures, robust automation capabilities, and exceptional customer support.

The implementation began with a phased approach, starting with one site in the UK, then expanding to France, and most recently to Germany. Today, Fareva has seven entities live on the Kantox platform, primarily hedging EUR, USD, and GBP exposures.

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Benefits

The implementation of Kantox has improved Fareva's approach to FX risk management:

1. Enhanced Visibility: Fareva now has a global vision of its FX exposure.  Comprehensive dashboards and analytics allow Fareva to better understand hedging timelines, rates and the positions they take.
2. Cost Transparency: The hidden fees that were previously embedded in bank transactions are now fully visible, allowing for better cost assessment.
3. Time Savings: Automation has freed up approximately half a day of work for finance teams, allowing them to focus on higher-value tasks.
4. Improved Reporting: The platform provides robust data analysis capabilities that were previously harder to reach when using Excel sheets.

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Looking Ahead

With Kantox's flexible platform, Fareva is now positioned to extend hedging from invoice reception to purchase orders and potentially to budget planning.

The company plans to continue scaling the FX risk management process and scale Kantox Dynamic Hedging® for most FX-exposed entities worldwide.

Their objective is to shift from Dynamic Hedging® to Kantox’s In-House FX solution to enable corporate treasury to centralize FX hedge and operations at corporate level.

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Ready to transform your FX risk management like Fareva?

Contact Kantox today to learn how our solutions can be tailored to your business needs.

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