SABIC Asia Pacific Pte Ltd (SABIC) has been awarded Asia Pacific’s Best Fintech Solution in the Adam Smith Awards Asia 2020, with HSBC named as its banking partner. The win follows the completion of a fully digitised trade transaction in which HSBC supported SABIC with the sale of resin from Singapore to a buyer in Malaysia in October 2019.
HSBC Singapore was the advising/nominated bank, acting on behalf of SABIC and HSBC Malaysia was the issuing bank of underlying letter of credit, acting on behalf of the buyer in Malaysia.
SABIC processes a large amount of short-haul trades between Singapore and Malaysia. Physical goods take a relatively shorter time to transfer in comparison to the time needed to process the exchange paper documents.
Utilising the Contour Platform, a single shared application, to conduct the transaction, the exchange of fully electronic documents was completed within 24 hours, resulting in just-in-time inventory management, removal of demurrage charges, shortened turnaround times and release of man-power handling paper documents for other activities.
By integrating the LC blockchain platform through R3’s Corda blockchain platform in the back-end with Bolero’s electronic Bill of Lading (eBL) system, the transaction entirely digitised the administrative process through the e-presentation of key trade documents, enabling:
The use of blockchain in trade also takes trade finance a step closer to a more sustainable future; by digitising the entire process using electronic version of bills of lading and other trade documents, the solution eliminates paper and physical dispatch.
Iain Morrison, Head of Global Trade and Receivables Finance, said: “We are delighted to have supported SABIC in being recognised for utilising such a cutting-edge solution. Trade between closely located markets is regularly hampered by the laggard of paperwork, which follows behind physical delivery of goods. The result for businesses is high storage costs and product delays. This transaction marked a stepchange in reducing the administrative hurdle.”
Janardhanan Ramanujalu, Vice President & Regional Head for South Asia, Australia and New Zealand, said: “We are delighted to win the ‘Best Fintech Solution’ Award and this win underpins the strong collaboration between SABIC, HSBC and Simply Packaging. Harnessing blockchain technology to digitize and optimize transaction processes allows us to respond swiftly and effectively to supply chain network challenges and seize emerging opportunities. We look forward to expanding this solution to more customers across Asia Pacific next year.”
Cross-border trade between Singapore and Malaysia was worth over US$110 billion in 20191. Whilst the physical transfer of goods between neighbouring countries takes a relatively short time – usually under 48 hours – the administrative paperwork often delays their delivery. The process of exchange and checking of documents typically takes 5-10 days.
Mr. Morrison continued: “Solutions like this could also help boost the efficiency of intra-ASEAN trade, characterised by many close-proximity shipping routes and strong trading relationships, which in turn helps trade to grow and flourish throughout the region.”
The Adam Smith Awards Asia are recognised throughout the globe as the ultimate benchmark of corporate achievement. A full list of the 2020 awards can be found at the website: https://treasurytoday.com/asa-2020-winners
The transaction adds to HSBC’s credentials in the digitsating trade using blockchain. Globally, HSBC has completed a number of groundbreaking transactions including several in Singapore including the world’s first fully-digitised trade transaction for Rio Tinto and Cargill2 in 2018, and industry first fully integrated paperless trade transaction in 2019.3
HSBC Group’s history in Singapore dates back to 1877 when its founding member, The Hongkong and Shanghai Banking Corporation Limited, opened its first branch on the island. A qualifying full bank, HSBC in Singapore offers a comprehensive range of banking and financial services including retail banking and wealth management; commercial, investment and private banking; insurance; forfaiting and trustee services; securities and capital markets services. One of the earliest banks to establish in Singapore, HSBC today is a prominent player in Singapore's financial services sector serving the banking needs of multi-national corporations, home-grown businesses, private banking clients, institutional and retail customers. In May 2016, HSBC locally incorporated its retail banking and wealth management business in Singapore and established, HSBC Bank (Singapore) Limited. HSBC Singapore has a retail network of 13 branches (comprising 10 dedicated HSBC Premier Centres, 2 HSBC Jade Centres and a Premier International Centre) and many locations across the island providing self-service terminals
About Saudi Basic Industries Corporation (SABIC)
SABIC is a global diversified chemicals company, headquartered in Riyadh, Saudi Arabia. SABIC manufactures on a global scale in the Americas, Europe, Middle East and Asia Pacific, making distinctly different kinds of products: chemicals, commodity and high performance plastics, agri-nutrients and metals.
SABIC supports its customers by identifying and developing opportunities in key end-use applications such as construction, medical devices, packaging, agri-nutrients, electrical and electronics, transportation and clean energy. Production in 2019 was 72.6 million metric tons.
SABIC has more than 33,000 employees worldwide and operates in around 50 countries. Fostering innovation and a spirit of ingenuity, SABIC has 12,540 global patent filings, and has significant research resources with innovation hubs in five key geographies – USA, Europe, Middle East, South Asia and North Asia.