One of the world’s biggest and most controversial commodities trading companies is to open an online market place in India in a bid to cater to the country’s millions of small time manufacturers and traders in aluminium, copper and other metals.
Switzerland-based Trafigura said it had been drawn in by India’s $8 billion primary metals market – in particular the trade in scrap metals – which is expected to grow at 8% a year.
Small and medium businesses contribute to more than a third of the market, but most of them depend on traditional methods of procurement.
Per-capita consumption of nearly all metals in India is far below world levels.
The online store, named Lykos, will sell consignments of 1 to 24 tonnes of aluminium, copper, lead, nickel, tin and zinc at index-linked prices, Trafigura said in a statement on Wednesday.
“There is a strong demand for refined metals such as aluminium, copper and zinc in smaller lot sizes, but currently the market suffers from lack of automation, erratic supply, poor quality control, complex transportation logistics and opaque pricing,” said Raoul Bajaj, chief executive of Trafigura India.
Customers will have to take delivery from warehouses newly built near manufacturing centres in Gujarat, Rajasthan and West Bengal.
More warehouses are planned.
Trafigura is the world’s second-largest independent metals trader and the third largest oil trader.
The company owns and operates a vast array of assets – from petrol stations in Africa to storage terminals in Brazil and metals processing plants in the Far East – and operates in 58 countries.
The company is also known for a slew of controversies including the illegal dumping of toxic waste in the Ivory Coast.