Major Chemical Companies to Launch E-Marketplace

July 26, 2000
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MIDLAND, Mich. — In mid-May, ATOFINA, BASF, Bayer, BP Amoco, Dow Chemical, DuPont, Mitsui Chemicals, Mitsubishi Chemicals, Rhodia, Rohm and Haas, Sumitomo Chemical and Van Waters & Rogers announced an agreement to create a new business-to-business (B2B) e-commerce company that will operate an on-line marketplace for the worldwide chemical industry. The size of the targeted market is estimated to be $400 billion. In early June, the on-line chemical marketplace initiative further announced a major expansion of its global presence. Ashland Distribution Co., Brenntag, Chemcentral, Ciba Specialty Chemicals, Celanese and Shell Chemical Co. have agreed in principle to participate in the venture.

The B2B company will be uniquely positioned to leverage the assets and industry experience of the world’s leading chemical firms, creating a robust, on-line marketplace that will address supply-chain inefficiencies and offer integrated solutions and services for buying and selling basic, intermediate, specialty and fine chemicals.

This new marketplace will enable deep connectivity between the different Enterprise Resource Planning (ERP) systems of suppliers and buyers. It will also facilitate global customer relationships and lower fulfillment costs by moving existing business processes onto the Web.

Designed to be open and inclusive, the neutral marketplace will include the supplier-to-supplier, supplier-to-customer and distributor markets, with important consideration for end-use markets, including formulators, converters, processors and fabricators. The company will have a strong supply-chain focus and, unlike other Internet chemical-market exchanges, will concentrate primarily on contractual sales that represent most of the worldwide chemical market today. This model will help streamline existing supply-chain activities by providing a one-stop shopping platform and greater transparency in planning processes.

The company, which plans to have operational business services in place by the end of this year, will be an independent entity with its own management team and board of directors. Its initial capitalization plan will be in excess of US $150 million.

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