Arcelor Treasury Standardizes on SWIFTNet as a Single Gateway — Realizes 605% ROI

SAN FRANCISCO, California, September 5, 2005  — Arcelor S.A. realizes 605-percent return on investment by implementing SWIFTNet as a single gateway for its consolidated corporate treasury activity according to an independent study conducted by Thoughtware Worldwide, LLC, an independent research and consulting firm specializing in value measurement.

          As one of the two largest steel companies in the world, employing over 95,000 associates in over 60 countries, manufacturing 47+ million metric tons of crude steel per year covering carbon steel (coated steel sheet, cold coils and hot coils), long carbon steel (beams, concrete reinforcement bars, merchant steel, sheet piling, and rails for public transport), and stainless steel for the appliance, automotive, construction, and packaging industries, Arcelor focuses on steel solutions for its worldwide customers.

          Arcelor was formed, in 2002, by the combination of three European steel giants, Aceralia (Spain), ARBED (Luxembourg), and Usinor (France). In combining these three organizations, the new Arcelor chose to centralize its treasury operations to corporate whereby the need for a centralized solution became readily apparent.

In 2002, Arcelor Corporate Treasury recognized a fundamental need to streamline its infrastructure to achieve greater visibility into case receipts.  The Arcelor Treasury was spending significant time maintaining multiple systems and connection points (ETEBAC 3,5, ISABEL, proprietary bank system, fax, telephone, and Internet) each with totally different characteristics (i.e., processes, data quality, availability, timeliness, and security level). Additionally, Arcelor was spending an inordinate amount of time and money on maintaining security protocols for the various connections, which were not consistent and required a growing level of resource commitment.  Moreover, any expansion process proved to be tedious.  New links with banks were difficult to implement, both in terms of time and cost.  Finally, Arcelor Treasury had a Disaster Recovery (DR) plan per geographic location.  Testing and maintaining each location’s DR plan was both costly and time consuming.  It was impossible to plan for the infinite combinations of bank availability.

To overcome these challenges, Arcelor Treasury made the insightful decision to work with the Society for Worldwide Interbank Financial Telecommunication (S.W.I.F.T.) to create a solution that would deliver a simple, secure and reliable communications platform to transmit financial messages to all of its cooperating banks around the globe.

By migrating to SWIFTNet, the Arcelor Treasury increased the automation of its business, including the flow and sharing of information across the enterprise on a global basis.  Subsequently, Arcelor Treasury has managed to reduce risks related to manual activities and position itself to handle any growth in future payments or receipts volume.

Better Reliability
Arcelor Corporate Treasury IT recognized the need to establish a simple, stable, and reliable communications platform to transmit financial messages to its banks. Arcelor needed to strengthen the reliability factor of its messaging platform and eliminate volumes of repaired wire messages.  Connectivity was running at 90% prior to SWIFTNet, now it’s almost 100%. “The SWIFT team in France is doing an excellent support job, working closely with Arcelor,” remarked Jacques Brax, Head of Information Systems, Arcelor

Improved Security
As Arcelor Treasury’s message volumes grew, it required a more secure environment in which to operate.  Arcelor Treasury was spending significant time in maintaining multiple systems and connection points (ETEBAC 3,5, ISABEL, proprietary bank systems, fax, telephone, and Internet) each with completely different characteristics (i.e., processes, data quality, availability, timeliness, security level).  Currently Arcelor Treasury is in the process of decommissioning a number of its legacy systems globally.  For example, 60% of Accounting Statements have been moved to SWIFTNet and the goal is to have 100% by 2007 resulting in reduced running costs of different systems.

Greater Efficiency
Arcelor Treasury IT realized that the communications platform for financial messaging was a critical component in meeting its controllership roles and responsibilities.  Arcelor’s fragile connections infrastructure, dictated that all transactions be monitored, not just exceptions.  This was further complicated as the majority of transaction statuses were updated on an end-of-day or next day basis.  With SWIFTNet, the Arcelor Treasury is enabled to increase exceptions management four-fold.  “Reserves management has become significantly easier through SWIFTNet,” said Pierre Boisselier, General Manager Finance Arcelor Treasury SNC

Quantifiable Benefits
Thoughtware Worldwide’s analysis showed Arcelor’s Corporate Treasury generating € 9.8 million in Total Benefits over a period of five years from its investment in SWIFTNet — including significant operational and strategic benefits.  Benefits are coming from everything from transaction cost savings, to headcount and working capital optimization.

 “While Arcelor’s centralization strategy clearly delivered value, moving to SWIFTNet enabled Arcelor to streamline its enterprise, enhance STP, and redeploy critical resources while scaling its enterprise,” said Timothy Guyre, Managing Director, Thoughtware Worldwide, LLC. 


          To view the comprehensive Arcelor-SWIFT ROI study by Thoughtware Worldwide, LLC, please select one of the following...

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About Arcelor, S.A.

Arcelor is a leading player of the global steel industry. With a turnover of 30 billion euros in 2004, the company holds leading positions in its main markets: automotive, construction, household appliances and packaging as well as general industry. The company - number one steel producer in Europe and Latin America - ambitions to further expand internationally in order to capture the growth potential of developing economies and offer technologically advanced steel solutions to its global customers. Arcelor employs 95,000 associates in over 60 countries. The company places its commitment to sustainable development at the heart of its strategy and ambitions to be a benchmark for economic performance, labour relations and social responsibility.


About Thoughtware Worldwide, LLC

A privately held company, Thoughtware Worldwide, LLC is headquartered in Boston, Massachusetts, USA and was founded in 2005 by a team of leading experts in value management bridging the best of academia and real-world execution. Thoughtware Worldwide delivers credible, comprehensive research and analysis that gives clients and their customers the means to make sound and insightful business decisions in today's volatile economic climate. Thoughtware Worldwide works with companies around the globe to audit and understand the value realized from their investment decisions.


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