<p>Asia&rsquo;s manufacturing sector has been supplying the world for decades, but the picture has evolved beyond the traditional powerhouses of Japan and China. Asia&rsquo;s factory footprint has expanded, driven&nbsp;by the success of countries such as India, Vietnam, Indonesia, Malaysia and Thailand &ndash; the so-called flying geese of market proximity. The region punches well above its weight in terms of global GDP in consumer electronics, industrial electronics, electric vehicles and semiconductors, according to McKinsey<sup>1</sup>.</p><p>Not only has Asia had to cope with the same challenges as the rest of the world &ndash; the Covid-19 pandemic, high interest rates, inflation &ndash; but it has also had to deal with an increasingly protectionist and challenging geopolitical landscape. Nevertheless, trade among the Association of Southeast Asian Nations (ASEAN) is forecast to grow by $1.2tn over the next decade, and India&rsquo;s economy will expand by over $390bn, according to the Boston Consulting Group<sup>2</sup>.</p><h2>Tacking to new trade winds</h2><p>Asia remains an economic bellwether. A 2023 <a href='https://ir.citi.com/gps/VYnarh2bZjaFHNUex0XnfscIDa7N6J%2B%2FzLZQbt2O0A1fxxgRf23SwEIPm1uoi5RZZnhSOX%2FI4A0Sv6BTJiVBUw%3D%3D'>Citigroup report</a> estimated that the region adopts new technologies 8&ndash;12 years ahead of the West. Its reputation for innovation formed the basis of the Asia Industrials Summit &ndash; a recent gathering organised by Citi Commercial Bank in Singapore, &ndash; which brought together a number of influential midcap companies to discuss future trends for manufacturers in the region.</p><p>&ldquo;We see Asia as a time machine to the future,&rdquo; says Jan Metzger, Head of Citi Investment Banking, Japan, Asia North and Australia, Asia South. &ldquo;Despite the complications in geopolitics today, it&rsquo;s easier to do business than ever before. Companies from Asia now have a market that is truly global, and they can target markets all over the world. If you go into the average Asian company, you see a level of entrepreneurship across the business that you don't see anywhere else in the world. It&rsquo;s an incredibly exciting time.&rdquo;</p><p>Recently, the strongest performing sectors in the region have included automotive, clean energy transition, and the transformation of the industrial space through automation and artificial intelligence. Once associated with high volumes of cheaper goods, Asia is now more than capable of manufacturing high-end components.</p><p>Among the companies attending the summit was Beyonics, a precision engineering and manufacturing solutions provider focused largely on the expanding market for medtech and mobility. Headquartered in Singapore, it has factories in Malaysia, Thailand and China. &ldquo;Asia's business ecosystem thrives on integrated supply chains, robust infrastructure, government support, substantial research and development and a skilled workforce,&rdquo; says its CEO, Ernest Sebak. &ldquo;For Beyonics, that means we are in a position to push the envelope for manufacturing tools and processes.&rdquo; </p>

<p>The backlash against globalisation, triggered by a variety of factors including fears surrounding free trade, immigration, the pandemic and fiscal austerity policies, has led to a subtle reset, with trends such as offshoring and nearshoring creating a global-regional hybrid. Beyonics is one midcap taking advantage of shifting trade patterns and demand.</p><p>&ldquo;We are now seeing developing countries put serious investments into healthcare with home healthcare products and this is driving a lot of the products that we&rsquo;re focusing on,&rdquo; says Sebak, &ldquo;With automotive, the industry is fragmenting into internal combustion engines, EVs, and hybrid combinations including hydrogen because people need cars with alternatives.&rdquo;</p><p>The China Plus One strategy is also driving the growth of new manufacturing regions and trade routes, as companies seek to reduce expenditure and diversify supply chains to make them more resilient amid uncertainty. &ldquo;Trading patterns are changing. We are seeing interesting new corridors emerge,&rdquo; says Gunjan Kalra, Head of Citi Commercial Bank, Japan, Asia North and Australia, Asia South. For example, Brazil, which was typically a very strong trading partner for Argentina, now trades more with India and China; the Middle East trades more with Asia than Europe. As a global bank, the emergence of these new international trends is very exciting.&rdquo;</p>

<p>&ldquo;Covid was a wake-up call,&rdquo; says Huaijin Bao, Global Head of Industrials for Citi Commercial Bank. &ldquo;Every company has had to rethink its supply chain strategy. We still talk about globalisation, but now we see localisation, with companies building plants across the region to be close to the market and save on logistics.&rdquo;</p><p>Asia is no longer an emerging market serving the West, but a force in its own right. Industrial companies are expanding in the region to serve Asian consumers while also planning new manufacturing facilities in the US and Europe to cater to the local markets, and only partially as a hedge against reshoring or nearshoring.</p><h2>Cross-border success stories</h2><p>One company capitalising on this metamorphosis is Chinese logistics provider De Well Group, which has offices across Asia, Europe and America. &ldquo;Compared with a decade ago, globalisation is now characterised by heightened technological integration, complex supply chains, and shifting trade patterns,&rdquo; says De Well Founder Time Yang. &ldquo;Asia has shifted from a manufacturing hub to become a key player in global trade. It has allowed us to significantly expand our footprint, especially in Asia-Pacific and North America. Today we serve a diverse client base, including traditional import-export businesses and cross-border e-commerce firms.&rdquo;</p><p>Given prevailing geopolitical tensions and market fluctuations, diversifying supply chains is a way to&nbsp; manage and/or mitigate risk. It is also resilience reimagined as a business opportunity. &ldquo;If you look at the mid-sized corporates, in particular in Asia, they are very ambitious. So they have to be in the most cost-efficient place,&rdquo; says Gunjan Kalra. &ldquo;They have to make sure their supply chains are resilient, and they are doing that proactively, not just within Asia but also outside this with the development of corridors in Latin America and other regions.&rdquo;</p><p>Asia&rsquo;s advantages continue to multiply. Its economy is maturing, thanks to an increasingly sophisticated digital infrastructure, improving workforce skills and productive trading partnerships. Yet for its midsize manufacturers to maintain their momentum, more investment is needed. &ldquo;This is an age in which industrial companies can grow incredibly quickly and get huge global relevance super fast,&rdquo; says Metzger. &ldquo;We are working with these companies very early on, and supporting their business ambitions from the start of their journey. As they grow, we provide a wider range of products, services and expertise, including investment banking capabilities.&rdquo;&nbsp;</p>

Citi Commercial Bank is a business of Citibank N.A. providing global banking solutions to mid-sized companies that are looking to grow rapidly and expand internationally. Any views expressed by Citi employees, unless reflected in Citi’s Research Reports, are those of the individuals and may not necessarily reflect the views of Citi or any of its affiliates.  Any opinions attributed to Citi constitute Citi’s judgment as of the date of the relevant material and are subject to change without notice.  The expressions of opinion are not intended to be a forecast of future events or a guarantee of future results.

<p><sup>1</sup>https://www.mckinsey.com/mgi/our-research/asia-on-the-cusp-of-a-new-era</p><p><sup>2</sup>https://www.bcg.com/publications/2024/jobs-national-security-and-future-of-trade</p>

Citi Commercial Bank helps companies like Beyonics and De Well Group to grow

All opinions expressed by the participants in this article are their own and do not necessarily represent the opinions of Citi Commercial Bank. Citi Commercial Bank is a business of Citibank N.A. providing global banking solutions to mid-sized companies that are looking to grow rapidly and expand internationally.

<p>For any SME (small and medium enterprises), scaling up and growing internationally is a prospect that is exciting and daunting in equal measure. From navigating that growth through economic headwinds to securing extra investment for logistics, marketing, infrastructure and staff, it&rsquo;s a challenge that can be immensely rewarding, as long as the right framework is in place.&nbsp;</p><p>For San Francisco-headquartered mobile payment processing company Boku, rapid growth brought with it a new focus on collaboration with specialist partners. In 2009, backed by venture capital, the company embarked on a mission to create a seamless global payment mechanism that would transform the way people transact.&nbsp;</p><p>Boku allows consumers to charge digital goods and services to a range of local payment methods, including mobile phone bills and digital wallets. Its success has seen companies such as Apple, Spotify, Microsoft and Netflix come on board as customers and, since users need no credit card to pay with Boku it has also been hailed as a boon to people who remain unbanked, of whom there are 1.4bn globally.</p>

<p>As the firm moved into new markets, requirements became more demanding and complex. &ldquo;At the beginning, in most of the places we were collecting money, we could rely on the telecommunication companies to get it to us relatively straightforwardly. As time went on, though, we scaled up, became a public company, supported new products like mobile wallets, and it was clear we needed to upgrade our banking partner&rdquo;, says Boku CEO Jon Prideaux</p><h2>Regulatory challenges can cost time and money</h2><p>The challenge for Boku was that its customers needed to accept payments through a variety of different means, such as WeChat Pay, Alipay and India&rsquo;s United Payments Interface (UPI). However, these local mobile-first systems tend to only operate in one country, adding to banking and regulatory complexity.</p><p>&ldquo;In Indonesia, for example, if you want to accept payments from Indonesians, then realistically you have to cover four separate mobile wallets, all of which are different and incompatible,&rdquo; says Prideaux. &ldquo;That's a heavy lift for our customers &ndash; so the seamless settlement position is an important part of what we do.&rdquo;&nbsp;</p><p>As the regulatory hurdles increased for Boku &ndash; from anti-money laundering and Know Your Customer (KYC) rules to differing ways in which the movement of funds must be handled in every country (Boku currently has 93 bank accounts in 27 countries) &ndash; Prideaux started a relationship with Citi Commercial Bank to help Boku with financing support and tools to help navigate local banking challenges.</p><p>Citi's longstanding presence in various countries proved to be a significant advantage for Boku. With over a century of operations in some of the countries Boku was involved in, Citi's integration into domestic clearing and payment networks allowed Boku to operate as if it were a local company. This seamless connectivity not only reduced operational barriers but also provided Boku with access to local insights and market intelligence, enabling it to tailor their offerings and better serve its global customer base.</p><h2>International capabilities</h2><p>Thierry Jenar, Global Industry Head for Digital, Tech &amp; Comms at Citi Commercial Bank, has been the bank&rsquo;s lead for the Boku partnership since it launched in 2020. He points out that Boku&rsquo;s rapid expansion &ndash; and the banking challenges that come with it &ndash; creates a situation that will be familiar to many SMEs. &ldquo;Companies tend to focus on banking locally as they expand internationally, because it's a little bit easier to set up,&rdquo; he says. &ldquo;However, while that can be expedient at first, it ends up creating problems down the road, especially as you grow, because you don't have a consolidated banking strategy and platform. Who wants to deal with, say, 15 banks around the world when you can deal with one?&rdquo;</p><p>With Citi on board, Boku was now able to make payments in over 100 countries as if it were operating locally and thus, benefiting from the local clearing networks. It is SMEs such as Boku that Jenar feels represent a great fit for Citi Commercial Bank. The &lsquo;sweet spot&rsquo; for him and his team is on young companies with high growth and international trajectory. &ldquo;Boku was the perfect client,&rdquo; he says. &ldquo;Relatively small, but with room to grow, through acquisitions. It was also already public with access to capital markets and had organic growth. We knew we could help them not just from a banking standpoint but also with advisory services. It was a relationship that made sense for both sides.&rdquo;</p><p>Jenar points out that there&rsquo;s a positive association to partnering with an established global player like Citi, too.</p>

<p>As Boku once again embarks on a new wave of sustained fast expansion, it&rsquo;s clear that forging strong partnerships and capitalising on the expertise of global financial institutions can be a key differentiator in achieving sustainable growth and success.</p>

Citi Commercial Bank helps companies like Boku to grow

<p>No successful company in history ever prospered without taking risks; juggling with potential jeopardy is a part of doing business. But lately, many leaders might agree that turbulent times are creating some of the thorniest challenges they&rsquo;ve experienced to date. In a <a target='_blank' href='https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/economic-conditions-outlook-2022?sp=true'>2022 McKinsey report</a>, executives responding to its annual Global Survey cited geopolitical conflict and inflation as the most pressing economic risks. Digging deeper into the data, supply chain challenges and currency fluctuation also loom large as ongoing concerns.</p><p>Currency fluctuation is a particularly acute problem associated with inflation. Simply put, when inflation increases, the money in the economy will tend to depreciate relative to other currencies &ndash; this influences how competitive an affected company can be, and creates potentially expensive headaches when it comes to sending and receiving international payments. One brand that&rsquo;s familiar with the vagaries of foreign exchange is Tramontina, a Brazilian cookware, cutlery and home appliances company with 10,000 employees, which manufactures 22,000 items and exports to more than 120 countries. Citi Commercial Bank is a global partner of Tramontina and supports the company across continents.</p>

<p>&ldquo;However, when you&rsquo;re operating in regions like Latin America and Asia, currency fluctuations can be hard to predict. We can&rsquo;t pass those costs onto customers whose prices we&rsquo;ve locked in, so we may have to eat those losses for a while but clearly this is unsustainable&rdquo;&nbsp;says Marcelo Borges, Tramontina&rsquo;s US CEO</p><h2>Hedging to address volatility</h2><p>Businesses such as Tramontina often employ hedging strategies to protect against potential losses caused by adverse currency movements. These may include forward contracts, options and other financial instruments. A close monitoring of related influencing factors can also help anticipate forthcoming currency movements &ndash; looking at elements such as interest rate differentials, inflation rates, geopolitical events and government policies.&nbsp;</p>

<p>However, this level of oversight requires specialist attention and analysis and, crucially, deep knowledge of local markets. Borges points to Argentina as one country where currency changes can be challenging: </p>

<p>&ldquo;Only by working with an experienced bank, with a local presence and intimate understanding of the market, can we make the right decisions about product pricing and about buying the commodities to make those products&rdquo; says Borges.</p><p>Tramontina&rsquo;s key banking relationship is with Citi Commercial Bank. Citi has operated internationally for over 200 years, and that has been helping Tramontina navigate in different markets, from Canada to India. Timicka Anderson, Global Head of Consumer &amp; Retail at Citi Commercial Bank, explains that local currency fluctuations can be managed in several ways. &ldquo;First, we can provide local currency financing &ndash; working capital, so they can make payments in the local currency, thus avoiding the additional costs that would come from using money from outside that country,&rdquo; she says. &ldquo;We also help with short-term hedging and can use a number of proprietary tools &ndash; such as our Citi Velocity digital content, data and analytics platform &ndash; to provide a detailed analysis of potential risks across a number of markets in different regions.&rdquo;</p>

<h2>A global view for an interconnected analysis</h2><p>Anderson points out that, for manufacturing companies such as Tramontina, it&rsquo;s not simply Citi&rsquo;s role to advise on currency challenges, but to look at the interplay of other factors, too. As a company that buys a lot of aluminium, for example, Tramontina must hedge not just its currencies but also its commodities costs. &ldquo;Our global presence helps us take a macro view across all markets,&rdquo; says Anderson. &ldquo;In Tramontina&rsquo;s case, it could be how aluminium has historically performed against the dollar.&rdquo;&nbsp;</p><p>As the US CEO of a company that&rsquo;s been operating successfully for more than 100 years, Borges has some simple words of advice for those looking to expand internationally: &ldquo;Play it safe.&rdquo; He adds that Citi provides him with the sort of detailed local information that isn&rsquo;t easy to access and which, together with the bank&rsquo;s financial tools, allows Tramontina to make the most informed decisions possible &ndash; and mitigate risk.</p>

<p>&ldquo;We play it safe every day,&rdquo; he smiles. &ldquo;Perhaps we don&rsquo;t grow as quickly as some other companies because of this, but we are in very good shape.&rdquo; Global commerce is, by its nature, an uncertain affair. But for Tramontina, by putting in place a well-devised risk strategy to address currency fluctuation and commodity costs, it shields itself from volatility and also seizes business opportunities &ndash; ensuring this century-old firm could still be supplying the world with products 100 years from now.</p>

Citi Commercial Bank works with consumer & retail sector companies to help them grow

<p>Regardless of sector, when the smooth running of organisations is discussed, a quote attributed to US General Omar Bradley is often employed: &ldquo;Amateurs talk strategy, professionals talk logistics.&rdquo; A company could sell the best, most innovative product or solution, underpinned by a brilliant marketing strategy, but if the logistics for delivering the goods aren&rsquo;t optimal then that company will underperform.</p><p>Martin Christopher, Emeritus Fellow of the Chartered Institute of Logistics and Transport, and author of the bestselling book <em>Logistics and Supply Chain Management</em>, concurs: &ldquo;The real competition in business sectors is between supply chains, not companies.&rdquo; This critical battleground is particularly tricky for the pharmaceutical industry. Stringent regulatory compliance and complex approval processes can lead to product launch delays and supply chain disruption. End-to-end supply chain visibility, while desirable for mitigating risks and optimising operations, is often difficult to ensure.<br /><br />As detailed in <a href='https://www.ey.com/en_gl/life-sciences/how-can-greater-localization-increase-supply-chain-resilience'>this 2022 study by EY</a>, the global nature of pharmaceutical distribution, usually involving various external partners, makes for a complex mix of worldwide shipping solutions across ocean, air and cross-border trucking. Integrating shipping data across these solutions can be hugely challenging and costly. Add in supplier supervision, geopolitical and trade considerations &ndash; plus the pharma-specific requirement that is cold-chain management (ensuring goods are kept at the correct temperature) &ndash; and it is clear that the sector requires world-beating supply-chain organisation.</p>

<h2>A specific set of challenges</h2><p>Fast-growing Taiwan-based biopharmaceutical company PharmaEssentia is one firm that can attest to the logistical challenges of operating a globally expanding pharmaceutical business. The Covid-19 pandemic, for example, saw PharmaEssentia potentially heading for supply problems as the worldwide demand for items such as syringe barrels skyrocketed. &ldquo;Like many pharmaceutical and biotech companies, we rely on different CMOs (contract manufacturing organisations) and suppliers,&rdquo; says Samuel Lin, PharmaEssentia&rsquo;s VP, Head of Business Operations and Strategy. &ldquo;During Covid, we were asked to share commoditised components like these with vaccine manufacturers. So we had to ensure we had sufficient stock to guarantee a stability of service to our customers and, ultimately, to patients.&rdquo;</p>

<p>For business continuity, PharmaEssentia turned to its global banking partner, Citi Commercial Bank, for an injection of working capital, helping the firm to carry on providing innovative medicines to patients in dire need. Laura Fogarty, Citi Commercial Bank&rsquo;s Healthcare Industry Head in North America, agrees that this was essential in order to avoid shipping disruption. &ldquo;There was a lot going on at the time,&rdquo; she says. &ldquo;Around November 2021, at the height of the pandemic, PharmaEssentia had received approval across much of the world for its lead drug candidate BESREMi, a biologic used to treat a rare blood disease. It was also launching in the US, and all of that required significant investment. Our working capital solution provided the company with the financial flexibility it needed to maintain its core business while ensuring the US launch of BESREMi was a success.&rdquo;</p><h2>Local market knowledge is essential</h2><p>Ko-Chung Lin, PharmaEssentia&rsquo;s founder and CEO, points out that Citi&rsquo;s global footprint &ndash; together with a deep knowledge of local markets &ndash; helped it weather the storms of Covid-19 and ensure a robust supply chain, as well as funding further commercialisation in global markets. &ldquo;Citi gave us solutions and dynamics for different markets,&rdquo; he says. &ldquo;They didn&rsquo;t just help with capital but also in an advisory capacity. We are essentially a group of scientists &ndash; that&rsquo;s our focus &ndash; and Citi brought the financial expertise we needed.&rdquo;</p>

<p>To support the market expansion of PharmaEssentia&rsquo;s lead product, BESREMi, Citi helped the firm raise capital through the issuance of global depository receipts in Luxembourg. Tapping the overseas markets allowed PharmaEssentia to elevate its brand recognition, as well as obtain access to new investors. In April 2023, this was the largest overseas offering at the time by a Taiwanese healthcare issuer. Citi also introduced a &ldquo;host-to-host&rdquo; solution to automate payment flows and create better operational efficiencies. &ldquo;Host-to-host allows full automation of files &ndash; sending and processing without the need for manual intervention,&rdquo; explains Fogarty. </p>

<p>Ko-Chung Lin describes that future forecast trajectory as &ldquo;hockey stick growth&rdquo;, with more investment and the hiring of many more talented scientists ultimately resulting in a greater number of successful patient treatments. &ldquo;This is such an exciting and rewarding client to work with,&rdquo; says Fogarty. &ldquo;There&rsquo;s a genuinely positive patient impact that you&rsquo;re a part of &ndash; that&rsquo;s why we come to work every day.&rdquo;</p>

Citi Commercial Bank helps companies like PharmaEssentia to grow

All images are supplied by PharmaEssentia

<p>Building bridges and breaking barriers in international trade has never been more important. In many small and medium sized enterprises (SMEs) operating globally, beleaguered CFOs and CEOs are facing circumstances that constrain business to an unprecedented degree. The geopolitical tensions between the US and China, for example, have impacted supply chains across the world, while the ongoing effects of Brexit have seen red tape tie up UK businesses and their trading partners.&nbsp;</p><p>Add in the aftershocks of Covid-19, ever-changing data privacy regulations, evolving trade agreements such as the US-Mexico-Canada Agreement (USCMA) replacing NAFTA, and the fact that the <a href='https://www.wto.org/english/res_e/booksp_e/wtr16-4_e.pdf'>World Trade Organization noted</a> that these barriers affect SMEs more than large organisations, and you have something approaching a perfect storm.&nbsp;</p><h2>Deep local knowledge is key to expansion success</h2><p>It&rsquo;s a view <a href='https://www.usitc.gov/publications/332/pub4953.pdf'>shared</a> by the <a href='https://www.usitc.gov/publications/332/pub4455.pdf'>United States International Trade Commission</a>, which points out that SMEs may lack the resources and local knowledge needed to navigate these increased complexities. But while these challenges are significant, they&rsquo;re not insurmountable &ndash; provided companies employ some expertise to help them on their expansion journey.</p><p>Volex, a global leader in integrated manufacturing for performance-critical applications and a supplier of power products, is a case in point. A new management team in 2015 prompted a change in strategy with the company expanding quickly to become a more profitable and acquisitive operation, buying related businesses around the world and growing its product offering.&nbsp;</p><p>Today, Volex is a more diverse and resilient business with a global footprint spanning 28 sites on three continents with over 11,500 employees across 24 countries serving the&nbsp;<a href='https://urldefense.com/v3/__https:/www.volex.com/markets/complex-industrial-technology/__;!!Jkho33Y!nITGsCaJfwKzuckGrJpd2M8Ose9IoaH-rVPOnWjgyf3R5KdDp-NFxwuNMqpo-jkkdw7Y9XGSn4gQOv871Cv-oTR2%24' target='_blank' rel='noreferrer'>complex industrial technology</a>,&nbsp;<a href='https://urldefense.com/v3/__https:/www.volex.com/markets/consumer-electricals/__;!!Jkho33Y!nITGsCaJfwKzuckGrJpd2M8Ose9IoaH-rVPOnWjgyf3R5KdDp-NFxwuNMqpo-jkkdw7Y9XGSn4gQOv871N3m612v%24' target='_blank' rel='noreferrer'>consumer electricals</a>,&nbsp;<a href='https://urldefense.com/v3/__https:/www.volex.com/markets/electric-vehicles-ev/__;!!Jkho33Y!nITGsCaJfwKzuckGrJpd2M8Ose9IoaH-rVPOnWjgyf3R5KdDp-NFxwuNMqpo-jkkdw7Y9XGSn4gQOv871F_Fcgc9%24' target='_blank' rel='noreferrer'>electric vehicles</a>,&nbsp;<a href='https://urldefense.com/v3/__https:/www.volex.com/markets/medical/__;!!Jkho33Y!nITGsCaJfwKzuckGrJpd2M8Ose9IoaH-rVPOnWjgyf3R5KdDp-NFxwuNMqpo-jkkdw7Y9XGSn4gQOv871EYl076Z%24' target='_blank' rel='noreferrer'>medical</a>&nbsp;and off-highway markets.</p>

<p>&ldquo;We&rsquo;ve doubled in size over the past five years and our plans are to double in size again,&rdquo; says Volex Group CFO Jon Boaden. A $400mn investment in acquisitions since 2018 necessitated moving into markets where they previously had no presence. &ldquo;We have vastly expanded our manufacturing, too,&rdquo; Boaden says. &ldquo;We&rsquo;ve advanced manufacturing capabilities in Mexico, the US, China, Indonesia, Turkey, Vietnam, India and more.&rdquo;</p>

<h2>Company acquisitions can bring banking challenges</h2><p>However, Boaden points out that this expansion comes with its own headaches. For example, acquiring owner-managed businesses means they may be relatively unsophisticated when it comes to foreign currency exposure. And moving into new territories means tackling different regulatory requirements, which can be particularly stringent in Volex&rsquo;s sector.</p>

<p>The firm&rsquo;s partnership with Citi Commercial Bank has proved invaluable in addressing many of the expansion challenges. &ldquo;Citi has proved really proactive and insightful when it comes to banking strategies,&rdquo; he says. &ldquo;We can leverage Citi&rsquo;s platform across every country we operate in. We haven&rsquo;t yet found a country where Citi can&rsquo;t support us in dealing with the intricacies of overseas business.&rdquo; This consistency in banking operations, with the same processes and controls being used worldwide, also reduces risk to Volex&rsquo;s margins from currency conversion.</p><p>Huaijin Bao, Global Head of Industrials at Citi Commercial Bank, is keen to point out that while Citi&rsquo;s initial role was to help with financing acquisitions, working capital and ensuring a smooth-running banking process in new territories, this has opened up as the relationship has deepened.</p><p>&ldquo;We enjoy a wide-ranging advisory role with Volex,&rdquo; says Huaijin. &ldquo;Not just on banking matters such as local regulations or global cash management, but also with industry insights. Our Industrials team comprises eight or nine subsectors, many of which are downstream industries that Volex is involved in, such as EV, consumer electronics, industrial technology and med-tech. This multi-sector expertise means we can advise our clients not just on their industry, but also share insights with them around adjacent and interconnected sectors. This means we can provide clients with a much broader view of trends and developments across relevant verticals.&rdquo; </p>

<p>Boaden agrees, pointing out that Citi has provided him with a &ldquo;tremendous amount of intelligence and a wealth of research&rdquo; that has helped inform Volex&rsquo;s growth strategy. &ldquo;With Citi&rsquo;s help, we&rsquo;ve identified the right markets, the right customers and the right ways of working. The business is operating incredibly well at the moment. It&rsquo;s all coming together.&rdquo;</p>

Citi Commercial Bank helps companies like Volex to grow

<p>There is no such thing in life as a sure bet. The same holds true in business, with companies that would seem destined for success often falling by the wayside – from retail groups misunderstanding cultural differences when they move into new regions to tech firms making the wrong call on product innovations. As the author Malcolm Gladwell says in <em>Outliers</em>, “Success is not a random act. It arises out of a predictable and powerful set of opportunities and circumstances.”</p><p>Concerned by climate change, investors are showing growing interest in sustainability-based investment opportunities. Many of the businesses helping to support the <a href='https://www.unep.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-economy' target='_blank'>green economy</a> prove that working towards what’s been dubbed the “triple bottom line” of profit, people and the planet doesn’t mean that you have to sacrifice profit in the pursuit of social and environmental goals. And as environmental, social and governance (ESG) concerns and requirements grow in importance due to increased public attention and scrutiny, there are significant opportunities for companies positioned to address them.</p>

<h2>Meeting industry’s environmental challenges</h2><p>One company that is helping organisations realise their environmental ambitions and, crucially, comply with increasingly stringent regulations, is <a href='https://www.cecoenviro.com/' target='_blank'>CECO Environmental Corp</a>. CECO is involved in the engineering, designing, fabricating and installing of systems and solutions that capture, clean and destroy airborne and waterborne contaminants from industrial facilities, as well as fluid handling, gas separation, emissions management and treatment and liquid filtration systems. In other words, they help to clean up the mess that industry creates.</p><p>There’s a famous saying, said to originate from Yorkshire, England, that asserts: “Where there’s muck, there’s brass.” Translation: there’s money to be made in tackling dirty or unpleasant jobs. And the continuing global expansion of CECO bears this out, because while many businesses may see ESG requirements as a challenge, they represent an opportunity for CECO.</p><p>“We provide solutions to customers to address those needs,” says Peter Johansson, SVP, Chief Strategy and Financial Officer, CECO Environmental. “Let’s face it, very few companies want to invest in pollution controls. Most companies realise the importance of doing so, but want to minimise the cost. So the challenge can be helping them to understand that there's true economic benefit to being a good steward of the environment and putting in the most sophisticated, highest-performing pollution or contamination controls that you can, because there are not only savings in the short run, but there's a long-term benefit to brand, a long-term benefit to your reputation as a company and also a long-term benefit to your relationship with your regulators.”</p><p>As a medium-sized company, CECO has seen strong global growth in recent years, driven in part by tighter environmental regulations placed on its customers, as well as closer scrutiny from other stakeholders of those customers’ businesses – but also by changing market trends in industrial operations. For example, Johansson points to the fact that many of CECO’s customers are now reinvesting in the manufacturing base of their respective countries whereas they previously saw globalisation as an opportunity to outsource work to lower cost regions.</p>

<h2>Return to the source</h2><p>“You might call it reindustrialisation or reshoring,” he explains. “We see it with one of our customers, which needs to process more metals in the US, rather than in countries that sit further from their main operations. Or another client that’s returning electronics production – such as semiconductors – to its US base. Consequently, we’re supporting the build-out of new capacity for customer operations that previously had no US manufacturing base, or had exited it. Shortening supply chains is also linked to this, which often requires investment in exhausted or ageing infrastructure. There are plenty of opportunities emerging where CECO can help with environmental solutions.”</p><p>And, as more and more of CECO’s customers require new environmental solutions globally, its business continues to grow, too. This continued international expansion prompted the company to prioritise working with a banking partner that shared its vision. Citi Commercial Bank became one of CECO’s lenders, helping to underwrite the brand’s revolver and term loan facility, and funding the firm’s development by providing growth capital. “Every time we work with Citi, it’s a positive experience,” says Johansson. “They have such a great footprint that they can support our global expansion and help us to pursue larger and larger projects.”</p>

<p>John Burke, Managing Director, Global Head of Business & Professional Services, Citi Commercial Bank, agrees that it’s Citi’s “boots on the ground” capabilities that help customers such as CECO overcome expansion challenges. “We have network banking teams around the world,” he says. “As your business expands into new countries, we have local colleagues that can support you, managing flows, risk, currency fluctuations, local practices, market nuances and more.”</p><p>Burke adds that Citi also supports CECO by advising on creative ways to grow its business, and points out that the two firms are a “great fit” for each other, as Citi has been engaging on sustainability and environmental initiatives for more than 20 years and is committed to net zero by 2050. “Citi is keen to work with and support mid-sized companies who play a key role in solving the world’s most pressing challenges and to assist them in capturing opportunities as they manage the transition to a more sustainable future,” says Burke.</p>

<p>“We’re proud to work with CECO,” he adds. “We are excited to see them continue on their growth trajectory and we want to be their global bank of choice to help build a seamless, successful expansion.” Three years ago, CECO’s annual revenue was approximately $310mn; in 2023 it is on track to exceed $525mn and, according to Johansson, they now believe they are “on a firm path to create sustained top-line and bottom-line growth targeting $600mn plus of revenue by 2025 with mid-teen EBITDA margins.”</p><p>“High-growth firms need access to high-quality finance,” he adds. “And with Citi on board, the opportunity to grow and create value is virtually unlimited for us as the focus on cleaner, more environmentally responsible industrial operations expands globally.”</p>

Citi Commercial Bank helps companies like CECO to grow

All images supplied by CECO Environmental

<p>The global landscape for charitable giving is shifting. According to the&nbsp;<a href='https://www.cafonline.org/about-us/research/caf-world-giving-index#:~:text=Key%2520findings%2520in%25202023,the%2520responses%2520for%2520each%2520country'>Charities Aid Foundation</a>, corporate giving is growing significantly, even as individual giving remains flat. It&rsquo;s a trend highlighted in Citi Global Perspectives and Solutions 2023 report that looks at charitable giving for the year 2022, <a href='https://www.citigroup.com/global/insights/citigps/philanthropy-and-the-global-economy-v3-0'>Philanthropy and the Global Economy v3.0</a>, which found that: &ldquo;Philanthropy is becoming more affluent and more institutional, with consequences for both society and individual nonprofits.&rdquo;&nbsp;</p>

<p>Yet the charity sector faces ongoing challenges, from the &ldquo;digital divide&rdquo;, for example, which can hamper smaller, less tech-supported nonprofits, to problems with <a href='https://cfg.org.uk/news/new_report_reveals_sectors_foreign_exchange_challenges'>currency volatility and high transaction costs</a>. These trends underscore the importance of efficient fund management, and the role of financial services support in providing the advice, solutions and banking technology needed for effective global philanthropy.</p>

<p>Against this backdrop, Benevity, a Canadian based company that is a leading global provider of social impact software, has grown internationally and has processed more than $15 billion in donations to support more than 470,000 nonprofits globally. With the support of Citi Commercial Bank, the company has scaled its operations to meet the growing demand for corporate giving and volunteering worldwide.</p>

<h2>The importance of CSR and global employee engagement</h2>

<p>As businesses increasingly recognise the value of integrating social good into their culture, the demand for comprehensive Corporate Social Responsibility (CSR) solutions has risen, prompting firms such as Benevity to expand their reach globally, facilitating workplace giving, matching, volunteering and community investment programs. </p>

<p>Expanding globally is fraught with challenges around regulatory compliance, local laws, cross border transactions and cultural and market differences. Benevity&rsquo;s experience highlights these complexities. Lance Ludman, Chief Financial Officer, says: &ldquo;We move approximately $2.5bn of our clients&rsquo; donations around the globe annually. We needed a platform that could handle this efficiently and with confidence.&rdquo;</p>

<p>Regulatory landscapes vary significantly across regions, lending intricate complexity to compliance. Additionally, cross-border transactions involve different banking systems, currencies and payment methods, making the process cumbersome and time-consuming. Ludman stresses the importance of speed and accuracy, especially during crises: &ldquo;When there&rsquo;s a crisis, our clients want their funds doing good immediately.&rdquo;</p>

<h2>Strategic financial cooperation</h2><p>Citi Commercial Bank plays a pivotal role in supporting Benevity&rsquo;s global growth. Through its extensive network and financial expertise, Citi Commercial Bank provides tailored solutions that have helped to streamline Benevity&rsquo;s operations, ensuring reliable fund disbursements and enhancing overall efficiency. One key product facilitating this is Citi&rsquo;s <span>WorldLink&reg; Payments Services,&reg;</span> which allows Benevity to manage cross-border payments efficiently.</p>

<p>Ehtesham Hazarika, Citi Commercial Banker for Benevity, highlights the importance of WorldLink: &ldquo;It enables clients to make cross-border payments using ACH (automated clearing house) rails, at significantly lower cost than traditional cross-border wires. This adds crucial value for Benevity and its foundation partners, allowing them to scale and pay nonprofits globally with minimal cost.&rdquo;</p>

<p>Similarly, the bank&rsquo;s CitiConnect&reg; platform has been instrumental in managing Benevity&rsquo;s complex payment processes. This API (application programming interface)-enabled gateway allows for integrated communication between Citi&rsquo;s systems and Benevity&rsquo;s ERP (enterprise resource planning software), allowing the smooth exchange of transactional information and efficient fund management. &ldquo;CitiConnect makes execution of payments simpler, even when processing multiple payment files in a day, each carrying thousands of transactions, often millions in value. CitiConnect also makes it possible to send enriched transactional data back to Benevity, which offers them visibility into critical information such as payment status, credit confirmation, cost transparency and more, thereby allowing Benevity to extend transparency down the value chain&rdquo; says Hazarika.</p>

<h2>Overcoming sector-specific challenges</h2><p>The philanthropic sector comes with other unique challenges, particularly regarding cross-border payments and regulatory compliance. Hazarika points out that while the volumes of payments processed for Benevity are high, individual transactions can be relatively small. Screening all payments for AML (anti-money laundering) within a reasonable time frame is, he says, a continuous challenge.</p>

<p>Certain regions also pose specific regulatory hurdles. For instance, India&rsquo;s Foreign Contribution Regulation Act (FCRA) adds a layer of intricacy to making foreign donations to Indian nonprofits. &ldquo;Making a foreign donation into an Indian charity is often not as simple as initiating a wire; it requires specific encoding and routing through a state-owned bank. Citi&rsquo;s ability to track regulatory updates and advise on such nuances is invaluable for Benevity,&rdquo; says Hazarika.</p>

<h2>Towards a philanthropic future</h2><p>Looking ahead, Benevity aims to further expand its services and reach more multinational clients. Ludman says, &ldquo;We expect growth from expanded demand for volunteering solutions. Continental Europe has been a new growth market for us. Charitable activity in Europe most often takes the form of corporate volunteering, but increasingly also donations. Citi Commercial Bank&rsquo;s support is crucial in understanding and navigating the nuances of each market.&rdquo;</p>

<p>The journey of Benevity and Citi Commercial Bank offers key insights for other businesses considering global expansion. Strategic financial collaboration is essential in managing regulatory compliance, navigating local banking systems and maximize operational efficiency. As the global landscape evolves, businesses must remain agile, leveraging the expertise of financial institutions to adapt and thrive in diverse markets.</p>

<p>In a world increasingly marked by polarisation and geopolitical tensions, the role of organisations like Benevity becomes even more critical. By maintaining constant dialogue and providing support to nonprofits that strive to alleviate the impact of these struggles, Benevity will continue to make a significant impact. In tandem, Citi can guide Benevity through this complex landscape, helping to ensure that philanthropic funds are managed efficiently and reach those in need. In a time when global unity is fractured, Benevity&rsquo;s commitment to global good and Citi Commercial Bank&rsquo;s support demonstrates how institutions can work together to help build a more compassionate and connected world.</p><p>As Casey Coates, Head of Commercial Banking in Canada concludes: &ldquo;Leveraging our global network and our solutions to support Benevity with navigating a complex landscape is a cornerstone of Citi&rsquo;s offering to mid-sized corporates and non-profits. Our collaboration has enabled Benevity to optimise its operations and propel the organisation&rsquo;s movement towards a philanthropic future&rdquo;.</p>

Citi Commercial Bank helps companies like Benevity to grow

<p>The pharmaceutical industry is undergoing a transformative phase, driven by rapid advancements in biotechnology, an ageing global population and an increasing demand for personalised medicine. According to <a href='https://www.deloitte.com/global/en/Industries/life-sciences-health-care/analysis/global-life-sciences-sector-outlook.html' target='_blank'>a report by Deloitte</a>, the global market for pharmaceuticals is expected to reach $1.2tr in 2024, driven by innovation, digital transformation and expanding access to emerging markets. However, this growth comes with its own set of challenges, including regulatory complexities, supply chain disruptions and the need for substantial financial investments.</p>

<p>In this changing environment, companies like Swixx Biopharma are setting benchmarks by adopting innovative operating models and expanding their geographical reach. The Swiss-headquartered company, celebrating a decade of operations in 2024, has carved a niche as a preferred partner for multi-national biopharma organisations, opting for an indirect operating model in some markets. <a href='https://www.prnewswire.com/news-releases/swixx-biopharma-expands-to-latin-america-through-a-strategic-acquisition-and-combination-with-biopas-302152039.html' target='_blank'>Its recent expansion beyond Central Europe into Latin America</a> highlights both the opportunities and challenges of global growth in the pharma sector.</p>

<h2>A decade of strategic growth</h2><p>Since its inception, the company has expanded significantly by addressing a critical need within the pharmaceutical industry. “The wisdom of our success lies in meeting a specific demand from our multi-national corporate partners,” says Jean-Michel Lespinasse, CEO of Swixx. “Pharmaceutical companies want to focus on the top 10 to 20 markets globally. To support them, we provide capabilities around the world that are equivalent to their in-house services, but with added flexibility and local expertise.”</p><p>Swixx’s model has proven particularly attractive to large pharma companies looking to optimise their market reach without the overhead of direct operations in every region. This approach has not only driven Swixx’s growth but also supports its reputation for reliable execution. “Our track record with companies like BMS, Alexion and Sanofi speaks volumes,” says Lespinasse. “We consistently demonstrate our ability to integrate and operate seamlessly within tight timeframes. Also, outsourcing operations to Swixx is helping the innovations of small or mid-sized companies to reach more patients.”</p>

<h2>Expanding horizons: the move into Latin America</h2><p>The expansion into Latin America represents a significant strategic move for Swixx. “Our partners encouraged us to explore this region, seeing the potential for similar success as in Europe,” says Lespinasse. The acquisition of Biopas, a leading Latin American pharmaceutical services provider, was a calculated decision aimed at leveraging existing regional expertise. “Starting from scratch wasn't feasible; acquiring a well-established player like Biopas allows us to hit the ground running,” he explains. This expansion is part of a broader strategy to establish a presence in key global regions, with plans already underway to explore opportunities in the Middle East and North Africa (MENA). “We aim to replicate our Latin American success in MENA, driven by strong demand from our partners,” says Lespinasse. This approach not only diversifies Swixx’s market presence but also enhances its ability to offer a cohesive service portfolio across multiple continents.</p>

<h2>Overcoming challenges with strategic support</h2><p>Navigating the complexities of international expansion requires robust financial and operational support. Swixx has relied on a consortium of financial firms to facilitate its growth and have the necessary resources in place. “The acquisition of Biopas required significant financial backing,” says Lespinasse. “Our banking partners have been instrumental in providing the capital and understanding our unique business model.”</p><p>Filip Janovsky, relationship manager at Citi Commercial Bank responsible for supporting Swixx’s global expansion, highlights the critical role of financial expertise in such endeavours. “Having an active and close relationship with Swixx for last few years and knowledge of the pharmaceutical sector, helps us meet Swixx’s needs and was important to making the acquisition happen,” he says. “Besides the acquisition, we support Swixx by ensuring they have the financial and operational tools needed to help meet their business demands across various markets.”</p>

<h2>The road ahead: innovation and strategic partnerships</h2><p>Looking to the future, Swixx is poised for further expansion and innovation. “Our immediate focus is on securing our presence in additional regions and exploring new business avenues,” says Lespinasse. This includes potential ventures into pre-commercialisation activities, which could diversify Swixx's service offerings and open new revenue streams.</p>

<p>Janovsky emphasises the importance of strategic financial planning in supporting such ambitions. “As Swixx continues to grow, discussions around capital structure, potential IPO or strategic partnerships will become increasingly relevant,” he says. “Citi’s role is to provide the expertise and support necessary to navigate these complex decisions.”</p><h2>Lessons in global expansion</h2><p>For other businesses eyeing international growth, the Swixx story offers valuable insights. “Planning ahead is crucial,” advises Lespinasse. “We spent years studying the Latin American market before making our move, ensuring we were fully prepared.”</p><p>He adds that a robust organisational foundation is the cornerstone of success. It’s important to invest in good people, processes and systems from the start, to seize opportunities as they arise and scale efficiently. On-the-ground expertise is also key, as requirements, timelines and compliance needs vary significantly by local market. Entity formation alone can differ by a number of months depending on region, as <a href='https://www.strategyand.pwc.com/uk/en/insights/enabling-global-growth-in-pharma.html' target='_blank'>this PwC report</a> outlines. And as a sector that, arguably more than many others, requires a sense of urgency and speed – to get life-saving therapies to market, for example – Citi’s ability to get Swixx set up financially in new markets in a matter of weeks was invaluable. “The market is fast-moving and companies looking to launch in new countries or for acquisition targets often need to move quickly,” says Janovsky. “Citi helps to make that process as frictionless and efficient as possible.”</p><p>In a dynamic global sector, Swixx’s journey exemplifies how strategic planning, robust partnerships and a flexible operating model can drive significant growth and success. As the company continues to expand its footprint, Swixx has positioned itself as a formidable player in the global pharmaceutical landscape, ready to meet the challenges and seek out new opportunities.</p>

Citi Commercial Bank helps companies like Swixx Biopharma to grow