Singapore

Details

  • Industry: Industrial Markets, Energy and Natural Resources
  • Type: Business and industry issue
  • Date: 10/10/2012

Commodity trading companies 

Centralising trade as a critical success factor

24-hour trading. Dynamic supply chain management. Logistical efficiency. Tax and investment incentives. The benefits of centralised commodity trading operations are clear, and many of the world's biggest oil and gas and mining majors have set up international trading structures to win competitive advantage.

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As commodities trading continues to globalise, many of the world's biggest oil and gas and mining majors have set up commodity trading structures. KPMG International's report titled Commodity trading companies — Centralising trade as a critical success factor was recently developed based on the views of professionals from KPMG's member firms worldwide who specialize in a range of global tax and advisory disciplines to help energy and natural resources companies understand the substantial benefits and risk management issues involved in these complex operations.

An international commodity trading company is a distinct, specialised entity set up to centrally manage trading activities for specific commodities in the oil and gas and mining industries. With one or a few of these specialised entities, a corporate group can unify its global trading and marketing activities and better manage and meet customer demand while improving their profit margins at the same time.

From North America and Europe to the Middle East and Asia, a number of locations around the world have emerged as vibrant centers for this activity. Preferred locations have investment-friendly government policies, strategic proximity to markets, and good financial services infrastructures.