Changing the Grain Game with ETG Commodities
Produced by Sean Bakke
Export Trading Group is a multi national company in the business of exports, imports, distribution and processing of various commodities. One of its most recent expansions has been the launch of ETG Commodities, its Canada-based wing. Operating on a sustainable business model of managing end to end supply chain of agricultural commodities from farm to retail shelves worldwide .ETG Commodities has witnessed swift success in the Canadian special crop industry since its inception. Throughout its global growth today and into the future, the business is committed to maintaining its personalized link with farmers and users of its products on a ground level.
Present in 46 countries around the world from Australia to the Ivory Coast, ETG is a company with extensive global reach. With more than 300 warehouses and processing facilities around the world, the company moves 3.2 million tons of special grains and manages 26 commodity verticals including oilseeds, pulses, cereal grains, fertilizers, and more. But despite this massive reach, ETG is committed to superior supply chain management, adding value and staying close to the farming community and its supply chain partners in every country it does business.
“We operate in a fast changing world of commodities, where we constantly need to innovate to stay ahead ” says Rav Kapoor, CEO at ETG Commodities. “In today’s world, changing weather and consumption patterns is one of the biggest challenge for our societies and that’s where we come in with our global reach and dynamic team of individuals to narrow the gap between excess supply in one region with strong demand in other. For example North America is one of the largest producers of specialty crops and Asia is the largest consumer. Our presence on a ground level in both continents helps us keep us ahead of the curve of this ever changing supply and demand matrix. In addition, we strongly believe in a 2 way business model in the countries we operate, for example in 32 African countries we provide seeds, fertilizers, and all the inputs to farmers and then buy back the crop they produce. It’s a 2-way business model where we benefit from selling all the input and buying all the output which then is used in our processing plants and distribution centers around the world.
“Staying close to the farmer helps us understand the farmer’s needs very well,” says ETG Commodities COO Harjee Makkar. “We’re present in 46 countries, and that helps us stay updated on destination market dynamics. At the same time, our presence at the farm level helps us understand the origination dynamics—what farmer is planning to seed and what kind of costing he has. If we are in 2014, we can contract with them for 2015, and that can only happen if you’re close to the farmer and understand what he’s planning.”
Ground Presence in North America
Export Trading Group has been in business for decades, and in 2012 the company expanded its reach into North America with the incorporation of ETG Commodities in Ontario to reach markets in Canada and the United States. Just over two years later, ETG Commodities has rapidly grown into one of the largest exporters in Canada, exporting more than 250,000 tons of pulses and oilseeds out of the country on a yearly basis. It’s growth that ETG Commodities attributes to a dynamic team that knows the market and is committed to staying ahead of the curve.
“ETG’s market intelligence and ground level presence helps us understand the international perspective better than our competition. For instance, yellow peas are grown in multiple regions around the world. Other than North America, Ukraine, Russia and Australia are major origins in the world, since we are present in all of these countries, we know international supply dynamics very well,” says Makkar, explaining ETG’s techniques for staying at the forefront of the industry. “ETG is a global brand today in the commodity world and we have been quite successful in developing good strategic partners at every point of the supply chain. May it be the farmers, shipping lines, transloaders or the importers around the world, these relationships have been instrumental in our growth. We stand behind our quality and our commitments, whether it is at the destination or at the origination. We will deliver on the quality, we will ship on time, and when it comes to the origination site we will make sure the farmer is paid promptly.”
The experience of the ETG Commodities team also plays a key role in the company’s growth and continued strengths. “Our traders and merchandisers are well experienced and understand the various risks of the business. When hiring new employees we ensure they have the market intelligence and connections which we can leverage on” notes Anshul Nagar, CFO at ETG Commodities. “ETG believes in mitigating the risks and thrive to innovate tools for the same, from hedging mechanisms to insurance products ETG has every tool at its disposal to make sure interest of our share holders and stake holders are protected at every step we take.”
Agents of Change
ETG Commodities has hit the ground running, and only has plans to grow further from here. This year the company successfully completed its first acquisition in TW Commodities, allowing ETG to increase its in-house capacity for processing, grading, cleaning and packaging grain. ETG is also branching out into newer crops like soybeans and wheat, and is actively seeking out new partners to expand its distribution reach further within Canada and the United States. It’s all part of the company’s quest for growth and success, and that means embracing the ups and downs and changes involved in the commodities market by utilizing effective risk management tools.
“We believe in out of the box thinking and nurturing innovative ideas to overcome the challenges in our industry” says Kapoor. “Shipping and commodities is an ever changing world, and our ability to adapt to the ever changing world keeps us ahead of the curve.”
“We are a group of people who drive change,” adds Makkar. “In this market things change every single day, and that’s something we are very good at handling. It’s about anticipating change, and sometimes even being an instrument to cause the change. It’s this foresight and anticipation backed with fundamental knowledge of the market that has contributed to the swift increase in our market share. We have a lot of drive and motivation in this team and a hunger to do better.”