The commodities business is characterized by thin margins and prices are determined largely by market forces. Most players in the market are price takers and the only way a company can be more profitable than others is by being efficient i.e. reducing administration costs etc. This is one of the key strengths of the proposed business. The company focuses on strict financial discipline and cost efficiency. This helps it stand apart from its competitors who have large overheads. The day to day administration costs are kept low and unnecessary overheads are avoided. The back to back business model helps the Company avoid inventory carrying costs.
