Published in May 2017, By Inatech
Inatech, the energy trading risk management (ETRM) systems provider owned by Glencore, has deepened its footprint in the Middle East by signing up Alchemist Trading.
Saudi-owned Alchemist, with offices in Dubai, has implemented Inatech’s Techoil platform to control risks and increase efficiency within its oil trading business. In less than five years Alchemist has grown its annual sales to more than $300 million covering energy markets from the tip of India to East Africa. The company has several Bulk Storage capacities in Jubail, Hamriyah and Karachi to support its trading activity. It also owns and operates a fleet of tankers, boats and trucks.
“We have reached a stage where we needed better ways of managing data and information,” said Alchemist Founder and Managing Director, Tareq Alkhulaiwi. “As a manager, for example, you want to make sure that you have an accurate view of the profit and loss of every trade. It is crucial that everyone sees the same data for informed decision making.”
“The platform enables us to scale up,” said Alkhulaiwi. “It automates a lot of checkpoints that were previously processed manually, expedites the approval process on trades, and generally pushes us to adopt best practice in business.”
There is an ever-growing need for efficiency in the physical oil trading business as lower energy prices squeeze margins for traders.
“The market is becoming more efficient through greater access to information,” said Alkhulaiwi. “Trading houses are having to step up their business model – not simply buying and selling, but adding value to the chain.”
The project was deployed in a collaborative manner taking into account Alchemist’s ongoing trading activity which had to be migrated onto Techoil. The joint team worked to deliver a timely and successful implementation of both front and back office functions.
“Our business model is anticipating precisely the energy price squeeze we’re seeing right now,” said Jean-Hervé Jenn, Chief Executive Officer at Inatech. “In these tough times, energy trading firms need a better handle on the profitability of trades. They can only do that by implementing systems that integrate front, middle and back office operations, systems like Techoil. As the business becomes more physical- the companies need to operate an optimised inventory to protect themselves from market and operational risk”.
Last week, Inatech and Alchemist hosted a cocktail reception where professionals from the oil trading and bunkering industry got to meet.
Techoil is an integrated ETRM system with pre-integrated ERP for physical oil traders. Energy trading companies are impacted by a number of factors that make calculating and optimising margins difficult. Energy markets are constantly changing, which makes market dynamics harder to understand and difficult to predict. The window of opportunity for traders is ever decreasing. Complex supply chains need constant monitoring and flexibility. Developed using Inatech's extensive knowledge and experience of the oil market, Techoil is an off-the-shelf and flexible product that easily integrates with other back-office applications and market data engines through standard APIs.Visit Techoil.com
Alchemist strives to be one of the leading energy and chemicals trading companies through innovative and creative solutions to deliver reliable, flexible and efficient services. The company was established in 2011 in Riyadh as a limited liability company. It now has a turnover in excess of $300 million. For more information, go to www.alchemist.com.sa
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