Enabling time-critical payments in the FMCG sector

M.H. Enterprises L.L.C. (MHE) is a Dubai-based Fast Moving Consumer Goods (FMCG) distributor established in 1978. Its business now includes more than 175 global FMCG brands, as well as a focus on chemicals and pharmaceuticals.

MHE currently employs over 2,500 associates, uses more than 245 distribution vehicles and operates warehouses in eight strategic locations around the UAE’s trade and logistics hub of Dubai.

The Challenge

The scale and nature of MHE’s business means it has to regularly deal with a large volume of invoices. This gave rise to several pain points within its treasury operations.

• Traditionally invoices were collated manually, requiring pre-planning and making the task both time consuming and operationally inefficient.
• The documentation process for processing and disbursing loans was time-consuming, which led to higher interest payments and longer deployment of working capital.
• Payments to some primary suppliers, like Nestlé, are time-bound and require settling before the end of each month, adding pressure on MHE’s treasurers and making effective cash flow management critical for the business.
• Supplier payments had to be routed through multiple banks to meet payment deadlines.

The Solution

HSBC introduced MHE to TradePay – a simplified, digital trade finance solution to address these challenges.

• MHE was able to draw down loans and pay suppliers within minutes of initiating a payment instruction.
• Eliminated bureaucracy and the need to submit transactional documents.
• Enabled MHE to enjoy “just-in-time” financing.
• Offered a seamless experience through simply uploading a payment data file.

The Outcome

TradePay’s benefits have been a game-changer for MHE.

• MHE’s traditional buyer loan limits, previously underutilised, are now increased and significantly utilised.
• Reduced the lead time and interest costs, which thereby improved cash flow management and resulted in savings on interest expenses.
• After experiencing the benefit of immediate payments to key suppliers like Nestlé, MHE has expanded the programme to more suppliers.
• Increased operational efficiency (in particular staff time and resourcing), enabling them to focus on business strategy and other key tasks.
• Strengthened MHE’s relationship with its suppliers.