Gunvor Group is one of the world’s largest independent commodities trading houses by turnover, creating logistics solutions that safely and efficiently move physical energy and bulk materials from where they are sourced and stored to where they are demanded most.
01/ Founded in 2000 as a merchant of crude oil and oil products, Gunvor today trades about 50%“transitional” commodities, including biofuels and natural gas, while employing more than1’500 people worldwide
02/ In addition to structured finance, Gunvor performs receivables financing and confirmation activity with several of its banks.
Managing such a global network of financial institutions requires a lot of coordination and paperwork.
01/ Receivables financing requires a constant flow of time-sensitive information about appetite, availability and pricing with multiple providers, which is time consuming to collect and cumbersome to reconcile.
02/ Email and telephone were predominantly used for collecting quotes from separate banks, while Excel was the tool to store and compare the latest data, which had to be manually copied out of emails.
03/ Meanwhile another database of past transactions also needed to be manually updated to gain an historical view.
04/ Gunvor’s finance team sought a tool that would enable them to perform transactions from beginning to end – from quoting to completion of the discount and repayment, with all its banks on the same system.
“We wanted one single place where we could do all of this activity, the price discovery and the follow-up of the operations, which could accelerate coordination with the banks.It was also very important to have a secure way to exchange documents – because it’s too easy to send an email with sensitive information to the wrong person or the wrong organisation.”
Janina Taneva, Structured Trade Finance Officer
Gunvor Group
In late 2020 Gunvor began using “Market" for price discovery and deal-execution on its receivables financing transactions.
01/ “Market” is a multi-bank tool for obtaining credit appetite quotes to manage risk derived from LC and open account flows, conduct end-to-end transactions (including the secure exchange of documents),and request pricing from lenders on deposits and loans.
02/ It provides a common reference by bringing all pricing interactions and transactions onto a single system with standardised exchanges and comparable quotes, enabling users to automate information sharing and gain insights and intelligence from their pricing data.
03/ While receivables financing activities usually happen within a clear framework (e.g. a Master Receivables Purchase Agreement) between a trader and their banks making establishment of new relationships difficult, “Market” can also play a business development or matchmaking role by helping corporates to find appetite on new names or unlock additional liquidity.
“We were contacted by a bank that was not part of our portfolio, and we have started exchanging with them with a view to building a relationship.”
Janina Taneva, Structured Trade Finance Officer
Gunvor Group
“Use of the “Market” platform is generally well accepted among our banks, most of them provide quotes promptly after we send requests. For new joiners, there is still a period of adaptation, but overall we receive prompt feedback from those on the platform, allowing us to allocate business to them in an efficient manner.”
01/ While the change management and adoption process has been straight forward internally for Gunvor, the main challenge is sensitising banks to this new way of working.
02/ However, in terms of their primary goal of consolidating or harmonising previously disparate and manual pricing exchanges, Gunvor has already successfully shifted the majority of its operations onto “Market”.
“Using the platform has saved us sending more than 3’200 emails over the past year.By 2022 our goal is to have 100% of the transactions flowing on “Market”,reducing even further the need for email.”
Janina Taneva, Structured Trade Finance Officer
Gunvor Group
