FUTURE BUSINESS DEVELOPMENT
1) Increase in export volume by 1 million tons due to transportation by railway wagons. This process involves purchasing at the elevator, ordering wagons and sending them to the port, with subsequent sale on CPT / FOB terms. In this case, the length of the money is 40 days. Also, you can increase the volume by auto transport.
2) There is also the possibility of buying cars for their own needs for self-planning of logistics without depending on the lease of the train.
3) CRASH (Processing of oil-containing crops). Today, there are sunflower processing capacity of 22 million tons per year on the market, respectively, there are about 15 million tons of raw materials for processing (sunflower), as well as rapeseed, soybeans and other crops. Thus, the raw materials on the market are available in sufficient quantities to load the processing capacity. The difficulty for the Group lies in the fact that large competitors use European and stock financing to purchase 30–50% of the need for raw materials for the year. Small and medium-sized plants do not have enough working capital to buy raw materials for processing (for example, to buy 50% of the 150 thousand tons of sunflower, a yearly amount (at $300 per ton), more than $20 million of funding is needed).
In turn, with funding, there is the possibility of renting processing plants.
We forecast an increase in our processing volumes initially to 600 thousand tons of sunflower with a subsequent increase to 1 million tons per year.
To implement this plan, tolling contracts were signed with processing plants and contracts for the supply of raw materials with farmers.
4) FOB. Today, the Group performs most of the delivery of goods on CPT terms. Unloading at the port to the trader’s company, where in the future it accumulates volume for sale and shipment.
Now the Group participates in positions where oil costs an average of $650-690 per ton, and grain costs $150-200 per ton. In order to accumulate 20-30 thousand tons of oil, $13-14 million of additional current assets are needed. For grain, such a volume is 35-50 thousand tons, $10 million. With CPT sales, the Group gets a quick turnover of funds.
The opportunity to sell on FOB will give an additional margin on oil up to $10, and up to $4 per ton of grain. As well as the opportunity to build their position on sales at peak prices (up to $10 in grain).
When trading on FOB terms, we see the interaction with the bank using FCR as follows: 1) the goods arrived at the port, 2) the broker confirms the bank (lender) that the goods are in the port and asks to pay for it, 3) after the payment a new batch is bought and so we do until the goods are loaded into vessel, 4) the buyer pays for the goods and the money is transferred to the bank.
FOB trade will additionally add 1–1.5 million tons to the Group’s trade turnover. This direction can be carried out separately from the current activities, which gives the bank the opportunity to control every purchase transaction and see a complete picture.