Agrocorp - Leveraging blockchain to digitalise processes
DBS helps develop first-to-market innovative blockchain-based commodity buyer and seller platform
“The blockchain platform that has been developed in conjunction with DBS has the potential to be a game changer in our space. Using it, we are able to have paperless and more seamless transactions, as well as provide our customers and bankers with an unparalleled level of traceability in the supply chain. Agrocorp’s business model is based on connecting farmers around the world with consumers in Asia and the Middle East, and we are now able to enhance that connection like never before."
Vishal Vijay, Head of Business Development, Agrocorp International
Agrocorp International is a leading global agri-commodity trading and processing company that specialises in the physical trading of agricultural commodities. Agrocorp has a global presence of 24 offices in 15 countries and customers in over 50 countries. Its annual trade volumes exceed 11.5 million metric tonnes of commodities and revenues are more than USD3 billion.
Urgent Need for Digitisation
Agrocorp was facing significant costs and inefficiencies from the large amount of paper documents generated from every trade by each party involved, including processing plants, truckers, shippers, banks, insurance companies and ports. Furthermore, since the payments and finance transactions were tied to the trade lifecycle, the process was also creating working capital constraints for the company.
Agrocorp needed a solution to digitise processes fast. Electronic data exchanges between all the parties in each transaction would have to be secure, while enabling the visibility, tracking, enforceability and commitment for executing autonomous contracts.
First-to-market Blockchain Platform
Agrocorp, with its blockchain provider Distributed Ledger Technologies (DLT.SG), and DBS collaborated to develop a first-to-market innovative blockchain-based electronic platform to digitise the entire process for commodities transactions.
Paper contracts have been replaced by blockchain-based digital agreements secured by digital signatures. Contract flows are set up so that each counterparty can upload and view trade documents. Any update or change needs to be validated by all the counterparties, which allows the contract to be executed automatically while ensuring the validity of the transaction.
Supply chain participants are able to access real-time updates on commodity prices and delivery information as well as trade financing for orders from any part of the world. Buyers can also look into the sources of their commodities, learn details of their trade more easily, and trace the information to achieve sustainability objectives.
The blockchain solution is integrated with DBS RAPID (Real-time APIs with DBS) to enable real-time connectivity between the customers’ systems and DBS.
Cost Savings and Efficiency
The innovative solution from DBS has delivered a multitude of benefits for all parties across the supply chain. Quicker processing allows goods to be shipped earlier, reducing charges at storage centres and interest costs to participants. Farmers were also able to receive payments for their goods more quickly.
The streamlined process has cut Agrocorp’s average working capital cycle by about 20 days. Their platform currently connects about 4,500 farmers in Australia to global end-buyer customers such as supermarkets and restaurants. The efficiency of the solution has provided Agrocorp more time to focus on developing new supply and customer networks to broaden its reach globally.
For DBS, the successful API implementation with a blockchain platform for the commodities industry is a first in the market and has great potential to be replicated to other companies with similar needs.