STRATEGY
SR2 strategies towards Farming & Commodity trading is rooted in our noble intentions to create sustainable opportunities for business development for our customers, partners and associates.
Our fundamental corporate strategy is founded upon the need to develop better ways to effect positive change for our partners and customers of their industries and for the world. SR2 offers its partners and clients the requisite resources to improve productivity.
We generate value at every stage of the supply chain by accelerating supply chain efficiency by integrating expertise in commodity origination, financing, risk management, commercialization, marketing, trading, shipping, logistics and delivery, we ensure our products are effectively moved to the right place in the right time, every time.
Our approach is to differentiate SR2 as a premier independent commodity trading company, delivering highest quality of products and premium service with an efficient manner, far much above and beyond other suppliers.
Natural phenomenon of our strategy to succeed in achieving our corporate goals are based on firm foundation in;
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Risk Management
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Commodity Finance
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Effective optimization of strategic assets
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Flexible pricing approach
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Progressive Research
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Integrated Logistics & Global Shipping
SUPPLY CHAIN RISK MANAGEMENT
Risk management is an integral to SR2 ’s long term business development and sustainable growth strategy. We manage risk in a holistic manner throughout the core of our business processes and clan culture corporate governance procedures. We have implemented robust risk management strategies and intelligent mechanisms that deliver most comprehensive and deep functionality in our end-to-end commodity supply chain.
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All our business opportunities we engage in are evaluated and considered from a risk-adjusted perspective. These supplementary efforts enable us to eliminate or significantly mitigate risk across all our operations and safeguard our position in the marketplace as a trader and supplier of choice for our partners and clients across the world.
Risk Management Practices
For every Purchases, Sales or Delivery contract for all the physical commodities traded by SR2 are secured by first-rated global insurance companies covering entire transition of the commodities by water, road or air. Both interest rates and foreign exchange risks are mitigated and managed through multi-dimensional derivative instruments including Plain Vanilla, Quasi-vanilla and Exotic derivatives.
Trading Risk Management
SR2 has employed advanced system which delivers complete control over trading operations, enabling each of our traders to optimise position management and leverage real-time information to take advantage of market movements and country policy amendments
Price Risk Management
Commodity prices are inherently volatile and unpreventable, making business planning a complicated exercise due to diverse variables that influence price variations. Price risk management is functionally integrated at the core of SR2 business operations involved in global sourcing, trading and supply of energy commodities, metals and minerals, chemicals, agricultural products amongst other bulk raw materials and finished commodities.
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Our deep domain in mitigating price risk provides sophisticated analytical tools for performing portfolio stress testing, sensitivity analyses, and what-if analyses. We thoroughly analyze real-time position and exposure at market, volumetric, credit and delivery levels for smarter risk decisions.
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We hedge price exposure using exchange traded contracts and over-the-counter (OTC) derivative instruments including swaps, forwards, futures and options through international exchanges like, New York Mercantile Exchange, London International Financial Futures & Options Exchange, Chicago Mercantile Exchange, London Metals Exchange and the Intercontinental Exchange among others.
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Our excellency in Price Risk Management enables SR2 to optimise value along the supply chain and offer our partners and clients intelligent solutions that their businesses can fully depend upon.
Counterparty Risk Management (CRM)
Our CRM system measures, manages, and mitigates the risk arising from counterparty default and its technological platform addresses the entire credit risk process and provides a full range of credit analysis and operational tools in the key areas of exposure, collateral, and counterparty management.
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SR2 uses safe, updated and most the rigorous procedures to make our trading negotiations successful and profitable. We mainly apply standardized rules such as Incoterm 2010 Delivery rules, UCP 600 Banking Rules and URC 522 Collection Rules among others.
As part of our counterparty risk management, we work with select suppliers, clients and associates who meet the highest standards and operate within professional framework. Before we offer or accept orders, we undertake proper due diligence. Our time and resources are all focused on pre-qualified counterparties.
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We assiduously protect the interests of our suppliers, clients, investors, financial partners and all our stakeholders from any kind of potential defaulting, financial loss, fraudulent transactions or other kinds of counterparty risks. We implement thorough regulations that aid in total deterrence of misconduct and any form of corrupt activities from all our counterparties.
COMMODITY FINANCE
Structured Trade and Commodity Finance
Our continuing commitment is to offer comprehensive financial support for our producer partners as well as extending credit facilities for our clients. Through our uniquely structured trade and commodity finance offering, our strategy is to invest in the relationship we have with our partners and clients for consistent business growth and expansion.
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In order to deliver superior value for the benefit of both our producer partners and clients across our commodity supply chain, SR2 cultivates collaborative symbiosis with highly reputable international banking, non-banking financial partners and private investors. We have access to adequate liquidity necessary to facilitate efficient transition of multi-commodities from where they are produced or stored to different areas across the world where they are needed by consumers.
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SR2 strategy for success is rooted in leveraging operational synergies between commodities supply chain and the global financial industry. We balance our diverse network of strategic international financial partners and are able to offer structured trade and commodity financing solutions to our producer partners and clients.
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Our long term growth approach will play a significant role in generating unique value in our entire supply chain activities and reputation, spanning the gamut from the origination of commodities all the way to final destination.
EFFECTIVE OPTIMIZATION OF STRATEGIC ASSETS
Underpinning our business development and long term growth is a proactive fiscal approach, to expand at a reasonable rate, not for the sake of expansion in itself. SR2 focuses on safeguarding and optimization of strategic access to key logistics assets which are an integral part of facilitating its commodity trade flows.
SR2 is primarily focused on global trading and supply of raw, intermediate and finished commodities by managing end-to-end supply chain throughout origination, financing, risk management support, commercialization, marketing, shipping and logistics up to delivery.
To generate value in its supply chain, SR2 engages in strategic partnerships and agreements that give it reliable, long term, ready access to unique infrastructure and requisite logistics assets without fully owning the assets. Resources are focused on one critical thing in order to maximize the highest efficiency required to move commodities to the market, cost effectively.
FLEXIBLE PRICING APPROACH
Fixed Pricing
Under our fixed price schedule, SR2 agrees to supply and deliver products to upstream, midstream, downstream or other third party partners, to a specific location, based on a fixed price. The price is fixed for the specific sales and purchases for one month to multiple-year terms. This is meant to allow our customers capitalize on seasonal market price swings while providing price certainty during unexpected market swings. The price for the products is calculated in desired currency, and quantities can be in metric, cubic meters or Imperial units determined when the transaction is executed.
​Index Price
SR2 agrees to supply commodities to customers, to a specific location. The price is based on the relevant industry price-index that varies monthly or daily, allowing full market participation. The price for the commodities is calculated in desired currency, and quantities can be in metric or Imperial units determined when the transaction is executed.
Spot Price
For spot contract transactions, SR2 can execute business undertaking with esteemed counterparties such as producers, utilities, pipelines, generators and industrial end users or any third parties using industry standard contract language and any of the pricing structures mentioned above.
PROGRESSIVE RESEARCH
To continually remain competitive in the midst of global commodity trading dynamics, research is at the heart of our strategy to excel in the marketplace. We constantly undertake critical research to gather and expand in depth global commodity market intelligence. We rely on impeccable market insights developed on global scale and diversity. SR2 research desk provides this independent commodity research across the entire commodities spectrum for internal usage in our different commodity divisions. Our highly experienced analysts are an important resource to achieve this important milestone.
Our independence enables us to continually collect, combine and analyze wide array of intricate data and transmute this raw data into concise tools necessary to make informed decisions with regards to strategic sourcing, competitive pricing, shipping, logistics and effective modes of delivery of commodities globally. We have critical market fundamentals necessary to support our partners in their business goals.
We do selectively extend specific commodity research service to customers on need-to-need basis. In such cases, we will always ensure that the research report(s) we deliver are as objective and as timely as possible. We further contract third party entities for short to mid term or even long term external research that relates to improving our business in the global commodity trading and supply industry.
INTEGRATED LOGISTICS & GLOBAL SHIPPING
Integrated commodity transportation, logistics and shipping operations
SR2 fully controlled and specially dedicated commodity transportation, logistics and shipping business division offers maximum flexibility and complements our capacities for managing complex logistical operations involved in moving commodities from the point of production or supply to global destinations.
Compliance in Commodity Export & Import operations
While there are a myriad of key requirements that must be filled before commodities are exported from the source country, even more daunting can be the specific requirements that must be met before a destination country will allow the commodities to enter their country. SR2 and all its international subsidiaries navigate these requirements and regulations globally, procuring and competitively getting your commodities supplied to you efficiently from our widely diverse source markets across six continents.
Connecting Africa to the World!
We enable clients from all over the world to achieve greater revenue growth through personalized logistics systems that deliver higher levels of customer satisfaction. Our global expertise is combined with unique knowledge, diligence and experience in Africa. Our objective is to be the gateway to Africa by bringing equilibrium in demand and supply between Africa and the rest of the world through value added commodity shipping and logistics operations globally.