Singapore – The Singapore Exchange (SGX) has acquired a minority stake in HeveaConnect Pte Ltd, a digital trading platform for natural rubber (NR), launched two years ago.
SGX invested $1.5 million (€1.2 million) through its subsidiary Asian Gateway Investments to acquire a 9.09% stake in HeveaConnect, the parties announced 3 March.
The move brings the total number of shareholders in the platform to four, SGX joining NR supplier Halcyon Agri Corp., Japanese trading company Itochu Corp. and DBS Bank Ltd.
“Having SGX invested in a trading platform is a game-changer for us, Gerald Tan, chief executive officer of HeveaConnect said in a 3 March written statement to ERJ.
The investment, according to Tan, will help HeveaConnect refine its offering towards gaining wider industry adoption and attracting bigger players to the trading platform.
"We have had positive indication from tire majors that they would join HeveaConnect post SGX's investment," Tan stated.
To date, he noted, HeveaConnect has matched over 250 kilotonnes of physical NR for global tire makers, with gross sales value exceeding $325 million (€270 million).
As part of the investment, SICOM futures prices will be made available on the platform, to facilitate physical rubber spot and long-term price discovery against SICOM benchmarks.
The SGX investment is intended to diversify the ownership structure of the company while enabling the platform to provide "market neutrality, data protection and governance," added Tan.
Launched in April 2019, HeveaConnect aims to build “a disruptive business to improve the price discovery process and facilitate collaboration on sustainability.”
Moreover, the platform is seeking to become a “data backbone” in the advancement of a sustainable rubber industry.
To this end, Tan said the platform aims to digitalise the entire NR supply chain – from farmer to producer, from consumer to facilitator – in a “data-enriched ecosystem.”
The custom-built platform helps streamline order-to-fulfilment workflow and offers digital tools to collect supply-chain data on the ground, the CEO pointed out.
“Conforming to strict procurement policies, these services address the critical sustainability and traceability needs of our customers, financiers, and NGOs,” said Tan.