When the term commodity trading is mentioned, our first thought goes to the trade of the end consumables which are needed to fuel the tools which are advancing modern society. Maybe yours was oil, maybe it was metals or maybe it was grain. You would not be wrong in thinking of these commodities, but have you ever wondered what goes into the production of these commodities? Behind these commodities which we touch every day, is the world of chemical trading.
What does a typical chemical trade look like? Simply, it can be broken down into four steps:
1. Identifying demand
As with any business transaction, it all starts with the receipt of an enquiry from either an existing client or a prospective client. Our sales and procurement teams then begin the process, working together to ensure that we fully understand the client’s critical success factors and formulating a supply solution which is designed around these critical success factors.
2. Connecting supply and demand
In the formulation of the supply solution is where any trader encounters the first obstacles which must be overcome. The reality of the global supply chain is that there is a geographical disconnect between where the materials, required to produce commodities, are produced and where they are consumed. Ultimately, this means that the chemical trader must tailor a solution which is all encompassing – it is not enough to simply find a material supply, but also transport the materials from where the producer to the end consumer.
Accordingly, the sales and procurement teams consider the various transport modes, clearing, forwarding, warehousing and the insurance required throughout the process. Once they have planned the best course of action to meet the client’s operational requirements, they then work with the various stakeholders in order to negotiate a costing model which is in line with the clients financial requirements.
Should the prospective client be satisfied with the proposed solution, the deal then moves through finance and legal teams who work to ensure that terms are agreed to, ensuring certainty as the various cogs of the supply chain start turning.
3. Traversing the supply chain
It is then over to the operations team, who are the core of the business. The responsibilities of any operations team member are far reaching and are dependent on the details of each deal. With a core focus on promoting the reliability of the supply chain, the operations team proactively monitor and communicate all progress from the moment they receive the deal, until the client has confirmed that they have received all ordered materials.
4. Final obligations
The deal then moves back into the focus of the finance and legal teams, who ensure that all obligations are performed within the given time frames. Once all operational and financial obligations have been performed, the deal is marked as complete!
Since 2010, Pure Trade Africa has served as the bridge between chemical producers and the commodity producers who are responsible for providing the materials which are forming the building blocks for a modern, progressive society. Should you be looking for more information on who we are and what we do, contact us!