Moving to target the burgeoning downstream oil distribution sector throughout Africa, Aspect Enterprise Solutions today underscores how the core functionality at the heart of its AspectCTRM trade and risk management system can help specialist African oil bulk distribution companies (BDCs) make more profit with less risk on every deal.
Aspect’s software as a service (SaaS) commodities trading, risk and market data applications delivered in the Cloud already dominate the BDC market in West Africa. Now the company is gearing up for a push into Central, East and South Africa where the challenges are the same.
BDCs occupy a vital position in the African oil supply chain, buying from large suppliers such as Trafigura or BP then storing, selling and onward shipping, typically by road tanker, to oil marketing companies.
It sounds like a simple process but in truth it is a complex one. Profit margins are inextricably bound up in international market pricing, government subsidies, ever changing storage and transportation costs, in-transit
losses and other factors. Effective trade and risk management tools are crucial to tracking deals, containing costs and maintaining profitability.
Many BDCs currently rely on standard office spreadsheets to manage their trading positions. But inherent weaknesses in contemporary spreadsheet software can lead to reduced profitability and at worst, losses.
Spreadsheets for example, while allowing businesses to easily create reports and calculate numbers, make it very difficult to reconcile data between different departments and different worksheets. Valuing cargos in transit or in storage is also prone to error when spreadsheets are used and when such values depend on external market indexes like Platts from McGraw Hill Financial.
Spreadsheets also have difficulty with the large volumes of data typically generated within BDCs. For example with a typical road tanker load at 30MT and a typical monthly bulk purchase of 30 000MT, more than 1 000 separate transactions will take place every month.
AspectCTRM solves all of these problems with multi-user, multi-department support, no limits on data size and access to real-time market prices and data from across the world.
Built expressly for oil distributors and traders, it makes none of the compromises of spreadsheets and includes all of the tools oil specialists need to do their jobs. An optional physical operations module further allows transportation and storage functions to be integrated, helping avoid losses in transit and minimising storage costs.
With complete visibility of purchases, cargos in storage and in transit, progress of ongoing trades and profit on completed sales, AspectCTRM gives managers complete business oversight and enables compliance and auditing. These can be invaluable when companies are seeking finance for further purchases or for business expansion.
All documents related to individual trades are stored securely in the Cloud where they are available to all authorised users anytime, anywhere without reliance on internal IT systems.
Traditional packaged software, managed service and ASP alternatives have proved to be costly to own, difficult to implement and maintain, and hard to use. Aspect’s Cloud-based solutions require no software to be installed, need little or no on-site support or IT resource, and have an easy to use Web interface.
Any fixes or updates are carried out by Aspect once at its own facilities and then are reflected immediately at all user sites.
Among the more than 75 West African companies using Aspect is Sage Petroleum of Ghana where CEO Emmanuel Egyei-Mensah says: “We chose AspectCTRM to manage and support our activities. It gives us realtime insight into all aspects of our business including stocks, logistics, finance, profitability and risk exposure.
“Our philosophy is to actively identify risks, obtain information about the risks and manage them effectively. That is our culture, which runs through everything we do.”