SUPPLY CHAIN FINANCE

This is presented as information, not a recommendation.

Three core Supply Chain Finance solutions from Demica

David Gustin - July 16, 2014 2:03 AM
Categories: Supply Chain Finance, Technology & Platforms | Tags: Citadel, Demica

Demica is owned by J.M. Huber, a diversified multi-billion dollar family owned company headquartered in the U.S. with operations and staff located globally. I had to ask what a company of this size is doing owning a vendor in the supply chain finance space? After all, J.M. Huber is a diversified multi-national company dealing with engineered materials and natural resources. Huber established a financial services division in 1997 and started working with Demica in 2001. In 2002, they acquired the platform. So they have held the standalone company for 12 years.

But just what does Demica do?

Demica’s three core products are focused on supporting supply chain finance, invoice discounting and trade receivables securitization. Demica currently reports on approximately US 13 billion of outstanding receivables on a daily basis.

1. Supply Chain Finance is supported by Citadel SCF , a fully hosted, web-based trade finance solution accessed and operated by a secure web interface. Alternatively, the software can be licensed and installed, although nearly all users prefer the hosted version. Currently the solution is white labelled by three banks as well as being used by a number of corporates as a hosted solution.
2. Citadel ID is an invoice discounting platform offered as an installed product for invoice discounters and factors.
3. Finally, Demica supports receivable securitization programs for banks with Citadel ASP. Demica acts as the reporting agent for these programs. Their primary activity is to support multi-bank receivables securitisation programs. They monitor and report back to the seller and all funding parties on a daily or weekly basis on the eligible invoices capable of being purchased by the banks. . Demica works with over 30 banks.

You can see an overview of the Citadel platform here
Demica also conducts periodic research around supply chain finance using an outsourced public relations group. You can see their research here
As supply chain finance platforms are few and far between, vendors like Demica can be involved in many RFPs. With many tier 2 banks and below unwilling to commit to build their own working capital or supply chain finance proprietary platforms, Demica is another solution in an area where there are not a long list of vendors specific to Approved Trade Payable programs.
Demica is also working with an international consulting and corporate finance advisory firm to create a SCF product the Middle East. They are customizing Demica’s Citadel platform to suit their requirements and are looking to get the program up and running this year. They also recently formed an alliance in Africa with Catalys to enhance the efficiency of access to working capital for small and medium-sized African businesses through its SCF solutions.
While Demica offers the technology platform, it can also introduce and assist companies to source funding. The company will typically partner with the bank and/or the corporate to support them with on-boarding. Given the small size of the company (less than 50 employees), it has limited on-boarding capability.
It’s not surprising that Demica claims to be full on at the moment given the monumental interest in supply chain finance.

- See more at: http://spendmatters.com/tfmatters/three-core-supply-chain-finance-solutions-from-demica/#sthash.Msu14B4r.dpuf