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Purchasing raw materials is a routine part of every adhesive formulator’s job. Until recently, purchases were either governed by a pre-existing contract or they were negotiated over the phone on a spot basis. While contract purchases serve an important role for steady business where predictable volume and pricing are critical, spot purchases are the preferred method for providing buyer flexibility on one-time projects needing a quick turnaround.
In the past, formulators had to call their sales representatives in order to make a spot purchase, a process that could be inconvenient for a customer who knew exactly what he or she wanted to order and did not need sales assistance. A need was identified for a new procurement method that would provide the customer with a more convenient way to purchase his or her raw materials. The Internet was the solution.
Quick Way to Purchase Raw MaterialsA Web site that provides a reliable and quick way to purchase quality raw materials is e-epoxy.com, the first Web site designed exclusively for the sale of epoxy resins and related products. Launched in January 2001, e-epoxy.com offers epoxy resins and related products from The Dow Chemical Co. and its international affiliates, as well as silicon-based products from Dow Corning Corp. It provides a simple way for formulators to make fast and simple high-volume spot purchases of epoxy resins and associated products for various industries including adhesives, protective coatings, electrical laminates, and structural and corrosion-resistant composites.
e-epoxy.com is not meant to replace the existing procurement channels and contracts that adhesives manufacturers rely on for steady projects and customers. It was created specifically for spot purchasers of epoxies and related products who do not need high levels of technical or sales support. In fact, one customer of e-epoxy.com, a manufacturer and marketer of adhesives for glass-reinforced epoxy prepegs and resin systems, commented that spot purchases make up about 20 percent of his total spending. The customer reported that this number was much less before e-epoxy.com made it so easy to make such purchases.
Customers of e-epoxy.com who manufacture and market adhesives favor suppliers who provide them with an on-line option. Customers can use e-epoxy.com for the high-quality product they need, on the day they need it. And because the site is not cluttered with flashy content, purchasing decisions can be made quickly and easily, significantly reducing procurement time and expenses.
Prices Updated RegularlyCustomers also benefit from the regularly updated product pricing on the site, accessed easily without a credit check or an established account. e-epoxy.com gives purchasers 24-hour access to an on-line marketplace for products and information. Prices are listed in the U.S. dollar, euros and yen, and the complete terms and conditions of the sale can be viewed on-line in nine languages: English, German, French, Chinese, Japanese, Korean, Spanish, Italian and Portuguese.
The site recently expanded to include delivery to locations in Latin America, Central Europe, the Middle East, Southeast Asia, Japan, Korea and Taiwan. The latter four areas now account for one-third of the site’s overall business.
e-epoxy.com serves a need that had been left unmet by previous procurement channels, and the response from customers has been overwhelming. It provides the adhesives industry with a better way to spot-buy epoxies and related products.
Global Demand for Epoxies Significantly Improving Increasing Feedstock Prices Pressure Producers to Improve Margins, Raise Prices
The Dow Chemical Co., Midland, Mich., confirmed in mid-November that the overall global consumption for epoxy resins has improved steadily since the beginning of 2001, to the extent that the gap between demand and supply has closed considerably. Demand for raw materials in the coatings industry has grown consistently at trend levels. Meanwhile, demand in electronics, an area hit hard in 2001 following an over-inflated 2000, has returned to that of the first quarter of 2000.
“Overall, though the market has seen improving demand, epoxy producers are still struggling to restore profit margins to reasonable levels,” says Phil Cook, global vice president for Epoxy Products & Intermediates at Dow. “Feedstock prices jumped considerably in 2002, putting everyone under tremendous pressure to increase epoxy prices. We anticipate a significant increase in epoxy pricing in the first quarter of 2003 in all geographies.”
According to Cook, the steady decrease in oil, gas and other petrochemical pricing since 1995, and the resultant more or less steady declines in epoxy-resin prices motivated some major epoxy-resin consumers to develop lengthy contract terms with their customers. This has contributed to the difficulty epoxy manufacturers have experienced in securing much-needed price increases and has contributed to the loss of margin. Consequently, the epoxy producers have insufficient margins to absorb the recent jumps in feedstock prices.
Dow is a leading science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $28 billion, Dow serves customers in more than 170 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of Sustainable Development, Dow and its approximately 50,000 employees seek to balance economic, environmental and social responsibilities.
For further information, visit Dow’s Web site at http://www.dow.com.