Deutsche Bank has established a supply chain finance (SCF) programme for BASF in China, its first for the multinational chemical company in the Asia Pacific region.

The solution, which has already onboarded a number of BASF’s suppliers in China, will enable BASF China to increase the efficiency of its cash flow turnover, while its suppliers will be able to access cheaper financing to meet their working capital needs.

According to Deutsche, the implementation of the programme – from signing to operation – took less than two months. With this SCF solution in place, BASF and its partners also gain access to automated processes including reconciliation, settlement, forecasting and monitoring, and lower transaction costs to enable reduced transaction pricing, the bank says.

“This solution not only provides BASF and its suppliers stronger working capital support, it is also a prime example in action of the strategic importance of the China market to both BASF and Deutsche Bank,” says Peter Qiu, Greater China head of coverage at Deutsche.

Demand for SCF has surged in recent months, as Covid-19-related liquidity pressures drive firms to seek out working capital tools. In a recent study, data analytics provider Greenwich Associates posited that SCF is set to outpace traditional trade finance as a driver of revenue, and this seems to be playing out in the data. As reported by GTR in September, proprietary findings from HSBC showed an uptick in the number of SCF transactions in Asia in June, while San Francisco-based SCF provider Taulia told GTR earlier this year that early payment volumes across its platform increased by more than 200% month-on-month in March.