ComTech Analyst Briefing Note – EKA Update

Eka has continued to grow and at a rate that places them in the upper echelons of the Commodity Trading and Risk Management (CTRM) vendor group and has found considerable success in selling products to a global base of users across multiple categories, including agriculturals, softs, metals, consumer products and most recently, energy. The company has embarked upon an aggressive growth strategy, expanding their functional coverage via internal development and measured acquisitions, allowing the company to better compete not only in the traditional single or multi- commodity trading and risk management opportunities that arise in around the globe, but further positioning the company to address the lucrative commodity management, or CM, markets.

Given the increasing globalization of the commodity markets, shifting supply and demand patterns, and global economic uncertainty, ComTech believes that advanced analytics will be an increasingly important component of the next generation of solutions for commodity traders, commodity consumers and the broader CM market. With Eka’s focus on advanced analytics as an integral component to their solutions, they appear to be well positioned to execute on their vision of the next generation of commodity management solution, termed “CM 3.0” or “Smart Commodity Management.” The company is well funded and has an experienced leadership team in place. Given the genesis of the company in the agricultural markets and success in metals, and with the recent acquisition of the EnCompass product (an energy centric solution), Eka would appear to be well positioned to attract and successfully service new CM 3.0 customers in the agricultural trading, metals and mining, consumer package goods (CPG), food processors and North American energy markets.

Read the document online or download it from the CTRM Center ComTech Analyst Briefing Note – EKA Update

Commodity Management and ERP

Over the last several years, the phenomenal growth and expansion of wholesale commodity trading has begun to have a significant impact on both business practices and strategic thinking across commodity supply chains. Producers and processors of raw materials (commodities) and sellers of finished goods that rely heavily on commodity feed stocks have had to come to terms with a business environment of generally increasing and significantly more volatile prices for their raw materials. Despite some weakening in commodity prices on the back of a stronger dollar and increased supply recently, volatilities remain problematic and in the longer-term, prices will continue to increase as the global population continues to grow and as more of that population become consumers of goods.

Recently, many of the larger banks have begun to exit commodities trading under fire from various regulators and a
set of new regulations. Their position has arguably been taken up by large commodity trading firms, with companies such as Glencore, Mercuria, and others expanding their operations and filling much of the liquidity vacuum left by the exit of the banks. These large commodity traders have also experienced much thinner trading margins and have increasingly sought to secure physical commodity supply by purchasing producers and their assets in order to de-risk a portion of their supply chain. In the future, the boundary between producer and trader may be increasingly blurred.

Read the document online or download it from the CTRM Center Commodity Management and ERP