DBS, Halcyon Agri launch digital trading marketplace for sustainable rubber
SINGAPORE (Dec 17): DBS Bank and Halcyon Agri Corporation on Monday announced a partnership to launch a digital marketplace for the trading of sustainably processed natural rubber.
The HeveaConnect digital marketplace aims to connect natural rubber stakeholders such as farmers, rubber producers and tyre manufacturers in an integrated ecosystem.
Through the digital marketplace, natural rubber producers and consumers are able to track pricing and supply information and transact directly on HeveaConnect.
Other offerings provided also include access to value-added services such as financing, insurance and logistics.
In a joint release, DBS and Halcyon say this offers a convenient one-stop shop for participants in the natural rubber supply chain, and promotes greater price transparency in the industry.
HeveaConnect will also be the exclusive platform for the sale of HEVEAPRO-sustainably certified TSR to the global tyre industry, which consumes about 75% of the world’s natural rubber.
As the world’s leading integrated natural rubber player, Halcyon has the supply and customer networks in place to provide the scale needed to help transition the global natural rubber industry. The industry is currently heavily reliant on traditional paper-based processes into a unified digital marketplace.
In turn, DBS, which has also taken a minority stake in HeveaConnect, will provide trade financing and financial advisory to participants on HeveaConnect.
As the digital marketplace’s main banking partner, DBS will offer services such as working capital financing, trade and commodity financing for buyers, and financing to smallholder rubber producers which previously may not have ready access to banking credit facilities.
HeveaConnect is targeted for launch globally in the first quarter of 2019. There are ongoing discussions with other natural rubber producers, consumers and partners to be onboarded onto the digital marketplace.
To help promote more sustainable practices in the rubber industry, Halcyon will inject the intellectual property rights of its sustainable natural rubber processing standards, HEVEAPRO, into the digital marketplace.
Only HEAVEAPRO rubber will be transacted on HeveaConnect. DBS and Halcyon say this is with the aim of encouraging a global push towards a more sustainable rubber industry.
Ongoing efforts are also being carried out by Halcyon to expand HEVEAPRO standards to include the tracking of sustainable practices in rubber plantations and smallholders’ rubber plots, as well as promote traceability requirements in the sourcing of natural rubber.
The natural rubber industry currently faces traceability challenges due to a highly fragmented supply base comprising millions of farmers. Once the farmers are onboard the HeveaConnect digital marketplace, all participants on the supply chain will be able to trace where each batch of natural rubber is sourced from, and if they are grown responsibly.
“HeveaConnect will not only be able to promote greater price transparency in the natural rubber market, but will also serve as an all-inclusive platform for farmers, producers, tyre manufacturers, as well as facilitators such as financial institutions, logistics and warehousing suppliers,” says Robert Meyer, executive director and chief executive officer of Halcyon.
“We are pleased to collaborate with DBS as our key banking partner for HeveaConnect,” he adds. “Halcyon is first adopter as a natural rubber producer and we are also in discussion with our tyre customers to come onboard.”
“By integrating our APIs to facilitate trade financing to both upstream and downstream rubber players through HeveaConnect, we are also able to deepen our understanding of our customers’ needs, allowing us to provide innovative advice to best position their businesses for a sustainable future. We are pleased to be part of Halcyon’s ambition to be the leading provider of sustainable natural rubber,” says Raof Latiff, head of Digital, Institutional Banking, DBS Bank.
As at 1053am, shares in DBS are trading 1.6% higher at $24.08, while shares in Halcyon Agri are trading flat at 40 cents.
