Reports ComTech Analyst Briefing Note of EKA | Page 3

Company Strategy
Commodity management (CM) is a term coined in 2008 to describe the use of “traditional” CTRM software products as the core of a broader solution
set that addresses the commodity procurement, transportation and logistics, processing, marketing and hedging requirements of a wide variety of
commercial enterprises. These companies, including food processors, CPG’s, metal processors and fabricators, energy merchants and mining
operations, have increasingly recognized the inherent risks associated with their commodity procurement and transformation processes, identifying
not only market and price risks, but also the risks associated with operationally and financially exposed multi-threaded supply chains. Utilizing CM
solutions, these companies can gain an enterprise wide view of operational constraints and options for maximizing value along the supply/production
chain; and actively manage and mitigate financial risks associated with foreign currencies, interest rates and credit. In order to provide the requisite
functionality to address the needs of CM, these solutions require not only robust and rich trading and risk management functionality, but they must
also provide:
the ability to manage complex, multi-model transportation networks
capture and management of the complex quality characteristics of multiple commodities such as ags, softs, metals, concentrates, natural
gas, power, oil and oil products and any number of other commodities utilized as feed stocks in production processes
capture and analysis of enterprise-scale risk exposures, and
a complex array of key performance indicators necessary to effectively manage and optimize a global scale operation.
Recognizing the growing acceptance of CM solutions, particularly in the agricultural and food markets, Eka has developed a fully capable CM solution
that can address the breadth of requirements in the markets they
have identified. Additionally, Eka management believes, based on
their conversations with industry participants, that the markets’
expectations of CM have moved past the initial capture and
management of commodity exposures along the entirety of the
supply chain (from source to market). This recently formed market
expectation and requirement is that CM solutions must move past
transaction management into providing a decision support
environment, founded in predictive and user-controlled analytics and
enriched with improved and real-time visualizations of key
performance indi cators and relevant market data and information.
The provision of a technology environment that enables this
information aggregation also facilitates the deployment of
optimization tools that can aggregate vast amounts of information
and data, and provide a near real-time view of operational or
Source: Eka
financial options that reduce risk and improve operational
efficiencies.
ComTech has reviewed many of Eka’s products and believes it is progressing well along the path to achieving this vision of the next generation of
CM, or CM 2.0 or Smart CM, though Eka will need to continue to develop additional capabilities and/or acquire existing components. The Eka.Analytics
solution is the current basis for this effort.

Outlook and Analysis
While the global markets for CTRM products have been soft for about the last 18 months, and many vendors in the space have seen year-over-year
declines in revenue, Eka has continued to grow and at a rate that places them in the upper echelons of their peer group in the vendor market. This
above market performance is due, in part, to their origins and market gravity in the agricultural segment of the Asia Pacific region, one of the few
bright spots in the current CTRM markets. Leveraging this advantage, the company has embarked upon an aggressive growth strategy, expanding
their functional coverage via internal development and measured acquisitions, allowing the company to better compete not only in the traditional
single or multi-commodity trading and risk management opportunities that arise in around the globe, but further positioning the company to address
the lucrative CM markets.
ComTech believes that advanced analytics will be an important component of the next generation of CM. Eka is well positioned to execute on its
vision of CM 2.0 or “Smart Commodity Management.” The company is well funded and has an experienced leadership team in place. Given the
genesis of the company in the agricultural markets and recent acquisition of EnCompass, Eka would appear to be best positioned to acquire and
successfully service new CM 2.0 customers in the agricultural trading, metals and mining, consumer package goods (CPG), food processors and North
American energy markets.

© Commodity Technology Advisory llc

January 2014

3