Disrupting the international commodity market

Transcription

1 Disrupting the international commodity market PRESENTERS LUND CONSULTING: TIMOTHY LILJEBRUNN, JESPER SUNDSTROM, KAISA VAINO, IRIS POLITIEK PRESENTING TO: MR BOISERLAIR & MR. LOBBE

2 MAIN CHALLENGE How can McGILL StLAURENT effectively leverage human, technological & financial capital to develop the next generation trading?

3 Offering more value to current customers Imagine this future for McGILL St LAURENT 50 million gross profit in 2020 Staying true to core values

4 OUR RECOMMENDATION Establish a trading platform for your customers and integrate suppliers of other commodities to offer a full product portfolio

5 McGILL StLAURANT trading platform Material Wood Grain Steel Lithium Quantity BUY BUY BUY BUY

6 Today s agenda Situation Analysis of the opportunity Recommendation Implementation Financials Risks Conclusion

7 Situation Business challenges of the trading industry CHALLENGES: Unpredictability of product sales Disrupt or be disrupted Traditionally of trading business Labor intensity

8 Situation The current business model is done using phones & in person meetings SUPPLIERS Grain suppliers Sawmills Customcutters McGill StLaurent Wholesale distribution Back to Back-model Phone conversation in-person meetings Customers Manufacture International importers

9 Situation The core of the business Core values Entrepreneurship Professionality Commitment McGILL StLAURENT Mission Sustainably build, feed and power the planet Vison: To develop a world class trading company fueled by entrepreneurial and creative minds

10 Situation Pinpointing what kind of business MS is in You deliver trades, sales and distribution of commodities worldwide, Yet you facilitate world wide business connections

11 Situation The financial objectives for the future Financial objectives for the future: $17-18 million EBTDA By 2021 $50 million gross profit By 2020 $200 million by 2018

12 Analysis Four important areas to analyze The industry The capabilities The trends The position

13 Analysis Different characteristics of different areas Wood Architectural wood Grain Energy market B2b b2b & b2c B2b b2b Margins Low Hihgh Low High volumes High Low High Mod Competition High Mod High High Barriers to entry Overview of the industries Low Mod Low high Trend Positive Volatile Positive Volatile

14 Analysis Strong current capabilities that could be an advantage in current industry Current capabilities: Relationships Technology McGill St Laurent Bravery Valuable Rare Costly to imitate Organized Risk management Curiosity

15 Analysis Sales are currently fluctuating Sales

16 Analysis Markets disrupted by accessibility What makes markets disrupt? Reducing the value of the middle man

17 Analysis Who becomes the winner? The one who provides the accessibility

18 Analysis Move to a more attractive position in the market Opportunity Number of commodities Glencore Size of company McGill St Laurent ABCD

19 Recommendation MAIN CHALLENGE How can McGILL StLAURENT effectively leverage human, technological & financial capital to develop the next generation trading?

20 Recommendation Establish a trading platform for your customers and integrate suppliers of other commodities to offer a full product portfolio Expand the current business to other geographical areas Expand the current business by hiring more talents

21 Recommendation 1 Growth potential 2 Competitive advantage 3 Profitability 4 Investment

22 Recommendation Trading platform is the superior choice Trading platform Geographical expansion Hire talents Ggrowth Ccompetitive advantage Pprofitability investment SUM: 11 SUM: 5 SUM: 8

23 Recommendation OUR RECOMMENDATION Establish a trading platform for your customers and integrate suppliers of other commodities to offer a full product portfolio

24 Recommendation A contingency plan if the original strategy does not go well Shut down the project Contingency plan Wait until the market is ready for a new try Expand your own product offering

25 Implementation Leveraging on the core competence of connecting commodities with buyers Establish a trading platform for your customers and integrate supplies of other commodities to offer a full product portfolio Implementing trading platform Higher volume trading Automatizing commodity connection Using customer data to predict commodity sales Tools to identify future growth opportunities

26 Implementation The MS automated trading platform to connect commodities 2.0 SUPPLIERS MS trading platform Customers Producers Selling their goods effectively and efficiently Trading companies Selling their goods effectively and efficiently Material Wood Grain Steel Lithium Quantity BUY BUY BUY BUY Offering full service product selection Energy Mining Agriculture Forestry Stone products Collect customer data to predict commodity sales to optimize to optimize and to identify new opportunities

27 Implementation Move to a more attractive position in the market McGill St Laurent Number of commodities Glencore Size of company McGill St Laurent ABCD

28 Implementation value proposition of digitally innovating the day-to-day-trading For whom Industrial manufactures professionals (and customers) and buyers In the market of Commodity trading Promising Export, custom transformation and storage solutions Proven by Financial success Long-lasting relationship State of the art tech solutions Entrepreneurial approach Strong brand image

29 Implementation Continous implementation cycle Build platform Frontend sellers Front end buyers Back end MS Hire 5 IT Hedge sales unpredictability Identify product growth opportunities Expand business Establish partnership Suppliers with complementary construction material offering Train customers and suppliers Practical implementation Account manager guidance and service Keep old ordering system in place

30 Implementation New offerings on the platform Wood Architectural wood Grain Energy NEW COMMODITY NEW COMMODITY Identified by sales data from trading system

31 Implementation Solving all challenges Unpredictability of product sales Disrupt or be disrupted Traditionally of trading business Labor intensity

32 Implementation - Reaching 15 gross profit million by 2020 Hire 5 IT staff Build platform Establish partnership Train suppliers Roll out Collect data Identify product opportunities Expand product portfolio

33 Financials Lower margins Bigger volumes Financial Impact

34 Financials Revenues mln $ Product diversity fuelling the growth, 20% of revenues from other categories by Energy Grain CWP Other product categories Sales

35 Financials Investment costs One/off Ongoing Trading Platform 0.5 mln $ 0.25 mln annually Product Portfolio expansion Role out activities 0.2 mln $ Total 1.2 mln $ 0.5 mln $ Ca 1 mln annually (trading team of 7-10 ppl)

36 Financials Reaching the financial objectives Financial objectives reached with the plan: $17-18 million EBTDA By 2021 $50 million gross profit By 2020 $200 million by 2018

37 Risks There are risks with various impacts but they can all be mitigated Risk Impact Mitigation Loss of personal contact Mod Keep account managers Industry unwilling to change High Educate System failures Low Old system

38 Conclusion The situation A company well off financially Objectives Developing next generation trading Capitalizing on market disruption Optimizing business model for disruption Key challenge How can McGILL StLAURENT effectively leverage human, technological & financial capital to develop the next generation trading? Our recommendation Establish a trading platform for your customers and integrate suppliers of other commodities to offer a full product portfolio

39 Offering more value to current customers Imagine this future for McGILL St LAURENT 50 million gross profit in 2020 Staying true to core values