Building a reliable global presence

Building a reliable global presence

COMMODITIES trading is at heart a global endeavour, as RCMA Commodities Asia CEO and chief trading officer Chris Pardey would describe it.

Only by achieving a presence in many countries and controlling different parts of the supply chain can one honour contracts and buy and sell effectively, he says.

Together with former colleagues from his ex-employer, global trading giant Cargill, Mr Pardey is fulfilling his dream of building an international commodities trading business.

"It's kind of an evolution. After 20-odd years working for corporates, we wanted to see if we could run a business ourselves. We've seen the success of Wilmar and Olam and Noble, and wanted to see if we could do something like that," he says.

In 2010, he and two others - Michael Coleman and Douglas King of commodity hedge fund Aisling Analytics - bought RCMA from veteran rubber trader Oei Hong Bie. Mr Oei established Singapore Tong Teik in the 1960s, and in 1998 the company was merged with Dutch trader Wurfbain to form RCMA.

RCMA's turnover in 2010 was US$1 billion. It had 65 employees in three offices in Holland, Singapore and the United States.

Mr Pardey says it was an opportunity to buy into an established, profitable business and grow it into something even bigger.

"We wanted to make it more international, we wanted to look at adding other commodities, and then also at investing in processing or plantation businesses," he says.

RCMA soon took advantage of an upswing in rubber prices and made record profits in 2011 on a US$2.2 billion turnover.

Net profit rose to US$32 million last year from US$19 million in 2010.

It also bought competitors - Alan L Grant in the US and UK distributor Corrie MacColl - and added three offices in Vietnam, the UK and China.

Today, RCMA has 105 employees and trades four commodities: its main business, rubber, which accounts for 95 per cent of turnover, as well as coffee, sugar and coal.

It buys commodities from producers in emerging markets like Vietnam and Indonesia, and sells them to customers in Europe and the US, like tyre manufacturers Bridgestone and Goodyear, and coffee roasters Kraft and Folgers.

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