We strongly believe that the success of the commodity business is largely determined by the amount of direct control you have over the value chain continuum. Trading, though integral, is just a part of the overall business chain. Value, on the other hand, is an intrinsic, intangible variable with varied connotations to different segments of business partners. R1 emphasises the effective deployment of resources to strengthen each process in the business to achieve the highest operational efficiency such that the end contribution is greater than the individual process outputs. A value thus created, transforms into strategic advantage for R1,and is extended as a tangible benefit to its business partners and customers.
At the shareholder’s level the group has access to its large rubber plantation base in China. Most of the Asian rubber is an unorganised sector characterised by small holders with very small plantations.
This is the most populous area in rubber trading which involves the following:
R1 has high involvement in each of the these activities and is continuously expanding its reach and strengthening foot-hold in each of these segments to maximise on the profitability, minimise the risk and creating unique value propositions for our customers. The group shall invest most of its time and efforts to concentrate in this segment.
The downstream of the rubber value chain includes:
- Warehousing at strategic locations
- Rubber applications
R1 is well placed with its strong network and involves itself in the downstream distribution and warehousing of rubber at strategic locations to serve the logistically long-haul markets to provide JIT deliveries to its customers, thereby also minimising the risk of exposure for them. We take over the complete price risk management in these cases and our customers get the product right at the door step with shortened lead times and the current market price. Moving further in downstream, R1, leveraging on its strengths in rubber trading, raw material and network shall selectively engage itself in investments in rubber industries as their ‘partner of value’.