Major Chemical Companies To Launch E-Marketplace

ATOFINA, BASF, Bayer, BP Amoco, Dow, DuPont, Mitsui Chemicals, Mitsubishi Chemicals, Rhodia, Rohm and Haas, Sumitomo Chemical and Van Waters & Rogers have agreed in principle to create a new business-to-business (B2B) e-commerce company that will operate the premier on-line marketplace for the chemical industry worldwide.

The size of the targeted market is estimated to be $400 billion. The new enterprise will offer open participation to other qualified chemical companies around the world.

The B2B company will create an on-line marketplace that will address supply chain inefficiencies and offer integrated solutions and services for buying and selling basic, intermediate, speciality and fine chemicals.

The electronic marketplace will allow connectivity between the different Enterprise Resource Planning (ERP) systems of suppliers and buyers. It will also facilitate global customer relationships and lower fulfilment costs by moving existing business processes onto the web.

Designed to be open and inclusive, it 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 supply chain focus and will concentrate primarily on contractual sales that represent most of the worldwide chemical market today.

The company, which will be established in July 2000 and 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 capitalisation plan will be in excess of US$150 million. Morgan Stanley Dean Witter has agreed to serve as financial advisors.