An independent legal entity based in Geneva, Covantis was incorporated in March 2020. Its digital platform, launched in February this year, is leveraging technology to modernize cumbersome post-trade execution processes, initially with a focus on grains and oilseeds operations.
Subject to regulatory approvals and upon closing of the transaction, Marubeni is to acquire equal ownership and rights as the initial shareholders of Covantis: ADM, Bunge, Cargill, COFCO Corporation, Louis Dreyfus Company (LDC) and Viterra.
Petya Sechanova, CEO of Covantis, said with the Japanese company as part of the entity’s shareholders, the startup will be able to continue investing in new capabilities, expanding to new origin and destination markets, along with new commodities.
International bulk commodities trading, including grain and oilseed, requires complicated business workflows including preparing, exchanging, and confirming many physical documents like contracts or certificates between multiple parties throughout the supply chain from supplier to buyer, noted the Japanese company.
“The issue at stake is to improve efficiency, accuracy, and transparency in the industry. Marubeni brings a wealth of knowledge in supply chain management with a very strong base in procurement, distribution and storage in its home market Japan.
“Together we plan to further strengthen the value proposition to the market participants and enable end-to-end supply chain optimization from the initial supplier to end-buyer,” said Akira Terakawa, CEO, food, agriculture and chemicals Group, Marubeni.
Marubeni Corporation is involved in the handling of products and provision of services in a broad range of sectors encompassing importing and exporting, as well as transactions in the Japanese market related to food materials and products, textiles, materials, pulp and paper, chemicals, energy, metals and mineral resources, transportation machinery.
Its activities also extend to power projects and infrastructure, plants and industrial machinery, finance, logistics and information industry, and real estate development and construction.
Additionally, it is involved in business investment, development and management on a global level.
Covantis said its network has significantly expanded since February this year. “We now have 24 clients, over 80 legal entities and hundreds of people who use Covantis for cross-border shipment execution.”
In May this year, James Zhou, chief commercial officer of LDC, told us the company sees blockchain technology as a key enabler of the industry’s digital transformation. “Blockchain can remove inefficiencies in a complex process, creating trust through data certification, enhancing data security, and by driving supply chain transparency and product traceability.”
And he said the Covantis platform was evolving incredibly quickly:
“As co-founders of Covantis we are seeing increasing buy-in from a wide range of industry participants to adopt it and buy in to the many benefits it has to offer. The more participants join the network and bring their business volume, the more value is generated in the ecosystem and the faster it can scale to other regions, more agri-commodities and additional functional scope.”