Chemical companies go for E

BASF, Bayer, DOW Chemical, DuPont and Ticona/Celanese have signed a Letter of Intent (LOI) to form a neutral business-to-business online marketplace focused on delivering products and related services to plastics injection molders around the globe. The size of this market is estimated to be in the $50 billion range.

This electronic marketplace will enable customers all over the world to purchase high quality thermoplastic resins, other plastic related materials, molding equipment, tooling, maintenance supplies, packaging materials and other related services. This new company will initially serve customers in North America and Europe followed quickly by Asia and the rest of the world.

The yet to be named company will actively seek additional reliable, quality resin suppliers as well as other suppliers in the value chain to sell their products via this new marketplace.

The new marketplace will significantly simplify business transactions, allowing customers to choose from a very wide range of products and services from participating resin manufacturers, additional suppliers and distributors on the same platform. This is expected to reduce transaction costs in the purchasing and selling processes.

The new company will offer a range of functionality including a catalogue with full product information, comparisons across products, order tracking, electronic billing and payment, as well as online customer support. The selection of the technology platform will be announced in the coming weeks.

The new venture aims to go online by October 1, 2000, subject to any required regulatory approvals. The company will operate as a separate independent business from the start. It is anticipated that the initial investment required will be $ 50 million.

The parties believe this is an example of where B2B e-commerce market places are going: customer-focused and supplier supported neutral marketplaces.