Taking commodities to the cloud with JustCommodity
3 August 11
A distressed asset, an emerging commodities trading market, and the development of a trading and risk management platform that is now ready to reach new heights. That, in short, is the story of JustCommodity.
JustCommodity is an investee of Infocomm Investments Private Limited, a wholly-owned subsidiary of the Infocomm Development Authority of Singapore. Its Executive Vice President, Joel Lou said the company originated from the Resco Group, which was one of the largest futures brokerages at that time. “It landed on hard times during the economic downturn and its assets went up for sale, which was when we took over.”
Commenting on the acquisition of software assets, Mr Lou said, “It was a good platform but it was developed before its time. However, we saw that it was a very bankable solution as commodities trading was underdeveloped at the time and there were not many players in the software space.”
Mr Joel Lou, Executive Vice President, JustCommodity
JustCommodity converted the acquired assets into a trading and risk management solution which it then marketed to large commodities companies like Golden Agri, First Resources and Sime Darby.
JustCommodity is known to have the leading market share in the edible oil space globally. Its web-based commodity trading solution, ContraXcentral, caters to edible oil, grains, softs, energy and metals industries, and improves the efficiency of the trading lifecycle.
“It seamlessly integrates front, middle and back office processes – all within a single automated information platform,” said Mr Lou. The solution is complemented by a team of experienced consultants as well as an excellent support infrastructure, he added.
While gaining a measure of success with this solution, the price tag of S$1 million to S$2 million and the level of customisation required meant that it was within the reach only of first-tier companies with revenues in excess of
Given this scenario, JustCommodity sees the potential of developing a cloud solution which would expand its market base significantly. The cloud solution will target the lower tiers, said Mr Lou, who cited the lower price points and highly-competitive landscape of Asia as reasons for moving its solution to this new paradigm.
“Price points are the big game changer,” explained Mr Lou. “CIOs are not willing to pay high prices for solutions.
“The cloud offers them opportunities to outsource maintenance and software development. And instead of six months implementation, a productised multi-tenanted solution can be rolled out in one, and at a fraction of the price,” he continued.
The in-development cloud offering has boosted JustCommodity’s optimism about the future, especially with regard to its expansion in Asia. The company has received grants from SPRING Singapore and International Enterprise Singapore for intellectual property development and to market its solution.
“As a home grown company in Southeast Asia, North Asia – especially China – will be a natural extension for growth,” said Mr Lou. “China especially is the market to be in, as there is zero presence of such platforms.”
“We want to be the first mover there and we also plan to expand into Eastern Europe and Latin America,” said Mr Lou. “All these are developing nations which will need affordable services.”This article “Taking commodities to the cloud” is reproduced with permission from the August 2011 issue of IDA’s e-newsletter, iN.SG. Further reproduction prohibited without permission. Share iN.SG with your colleagues and business partners and invite them to keep themselves up to date with the latest in Singapore’s infocomm developments today!