By Oh Boon Ping

THE rally in commodity markets has not only benefited traders and financial institutions but also services providers such as JustCommodity Software Solutions. 'Our financial track record since commercialisation is stellar and growing at a rate of 100 per cent year- on-year from 2006 to 2009. We see significant potential for growth in the years ahead,' says the company's executive vice-president Joel Lou.

JustCommodity services sectors including cocoa, coffee, grains, palm oil, soya, sugar, rubber and wheat. And plans are afoot to extend its offerings to oil, gas and metals.

The company, which opened its doors in 2002, is the only homegrown Singapore company in this space. Mr Lou, who had two years' experience in commodity markets through his family business Tropical Oil Products, said he saw an opportunity in this space and took over the helm of JustCommodity in 2006.

The main focus is in Asia, which has seen rapid growth in commodity trading. Here, plans to launch the Singapore Mercantile Exchange by year-end are well under way. And the island aims to become a carbon-trading centre by providing incentives to developers of carbon projects.

In Singapore, JustCommodity sees potential in providing risk management and hedge accounting solutions to commodity traders in particular, as all companies formed in Singapore and listed on local exchanges must start using global accounting standards by 2012. International Financial Reporting Standards (IFRS) are global benchmarks already adopted by 113 countries as of early this year.

JustCommodity provides complete trading solutions to meet the forward requirements of companies dealing in the commodity verticals in the region.

Already, it has a customer pool of around 20 companies and counts Sime Darby, the world's largest integrated plantation company, as its biggest customer. Other big names include Asian Agri, Cargill Temasek Plantations, Golden Agri Resources, KL-Kepong Group, IOI and Unimills.

Mr Lou says JustCommodity has embarked on a two-part growth strategy. First, it aims to expand geographically by setting up overseas marketing offices within Asia, Europe and the Middle East. The target is to set up a global marketing network by 2011.

Second, the company has a development pipeline to provide software solutions to more commodity sectors such as metals, oil and gas and carbon traders. In Asia alone, the company is eyeing more than 1,000 potential opportunities in the soft commodities business, says Mr Lou.

For example, it sees cloud computing as a platform that can host its solutions online so clients can save on capital expenditure on hardware, software and services. They pay only for what they use.

'We anticipate launching our Software as a Service (SaaS) solution in the next few months and will allow us to penetrate a larger chunk of our market with less time,' Mr Lou says.

'Our proprietary solution is unique, with emphasis on business intelligence. We strive to create value for clients by increasing efficiency and profitability through increase in decision support.

'Our solution is significantly more affordable, and takes less time to implement than any other.'

According to him: 'There are no real competitors in Singapore as no one can match us in this space. Globally, there a few companies who have a similar product, but they have a less sophisticated platform.'

However, the business is not without its challenges. For example, JustCommodity sometimes finds it difficult to convince companies to make the transition from old- fashioned trading methods to more technologically savvy ones. This sometimes involves trials, but the conversion rate is high.

Looking ahead, JustCommodity reckons the outlook is promising, with potential revenue growth of 500 per cent over the next three to five years.

In recent months, commodity markets have staged a sharp rally that saw prices of metals go through the roof. Gold touched a high of over US$1,140, while silver has hit its highest level since July at US$18.43 an ounce. Platinum has hit US$1,451.50 an ounce, its highest since September last year.

This article was first published in The Business Times.