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Wide range of chemicals can be purchased online
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BUSINESS
July 17, 2000
Volume 78, Number 29
CENEAR 78 29 pp.19-26
ISSN 0009-2347

E-Business for Chemicals

Companies begin exploring electronic opportunities

Ann Thayer
C&EN Houston

Timescales are being compressed. Change that used to take more than a year to occur now happens in about two months, believes at least one chemical company executive with decades of industry experience. The traditionally staid chemical industry, faced with the challenge to act now or miss opportunities, is evolving to stay apace.

The evolution of electronic commerce, or e-commerce, in the chemical industry is already entering its third era, participants and observers remark. In sharp contrast to geologic timescales, these eras are called "1998, 1999, and 2000." And the eras can be distinguished in two ways--by the roles different participants play and by the offerings developed for e-commerce.

In 1998, many chemical companies began creating informational websites. The second era saw the emergence of e-marketplaces. Start-up dot-coms opened transaction channels in 1999 and brought some of the first chemical commerce to the Internet. From a corporate perspective, the winding down of spending on Y2K and other information technology projects freed up resources and thinking for new initiatives in the changing marketplace.

This year marks the emergence of the chemical industry into "e-business." Companies are organizing around interacting and connecting with their customers and each other. Their approaches are designed to transcend e-commerce--just buying and selling goods through electronic channels--and become e-business. Moving toward services, e-business is expected to touch on all organizational areas and functions.

E-business is anticipated to reduce costs, increase efficiencies, expand markets, extend customer bases, and improve supply- and value-chain management. However, it may also increase competition, decrease market shares, bring lower prices and margins, eliminate jobs, and bring other changes and upheaval. Still, the chemical industry is considered among the best suited for e-commerce because it is fragmented with a variety of widely used products; has global reach; and includes multiple companies that, as each others' customers and suppliers, will benefit from being connected.

In five years, about 25% of the nearly $1.87 trillion in estimated global chemical sales is expected to move to electronic channels, according to data from Forrester Research, Cambridge, Mass. Sales through electronic channels are projected to at least triple in each of the next few years. By 2003, Forrester predicts chemicals will be the third largest business-to-business electronic market after the computing/electronics and automotive industries.

"Today is the end of the beginning," observes Russell H. Gowland, a partner with Andersen Consulting, Chicago, and leader of its chemical industry e-commerce program. "The beginning was a lot of the risk takers and the early adopters moving out fairly aggressively. Now, even the conservative chemical companies and the 'never will' types are naming e-commerce or e-business directors and forming strategic task forces."

Strategy or fear?

Just about every chemical company has an informational website, although of widely varying quality, notes Richard Payne, president and chief executive officer of fobchemicals.com, Chicago, and former director of e-commerce at Dow Chemical. "Companies are starting to see an impact from their websites," he adds, and thus are thinking about providing greater functionality and interaction, as in customer or technical service.

The next step is transacting business. "In the chemical industry today there is a pretty small number of company sites where you can actually transact business," Payne says. "And then last, but not least, is can you collaborate?" he asks, for example, through system-to-system links. With a few exceptions, U.S.-based companies are about 12 months ahead of their European counterparts.

Payne sees two measures of how much progress a company has made. "First, look at its website and see what they are doing and how aggressive they are about putting up information.

"Second, study their enterprise resource planning system and where they are in implementation and stability," he continues. "If they have strong, global installation, then they probably want e-commerce to move ahead aggressively. But if they don't have that, then they are probably a little scared of e-commerce because the Internet shows the status of your back-end system."

Chemical companies began to push ahead about this time last year, making major strides in the past few months. Eastman Chemical, Dow, and DuPont announced initiatives including corporate sites for customer transactions, investments in startup e-marketplaces, joint ventures, and industry consortia. According to Fred Buehler, Eastman's director of e-business, there is a simple premise: "E-business will radically change our industry in the short term. The early adopters will win, and the laggards will lose."

"Some companies began with a defining strategy, and others jumped right in," Gowland comments. The simplest strategy focuses on internal process excellence or being a low-cost provider. "From an e-commerce perspective, it suggests not doing a lot or creating much sophistication," he explains. Another strategy takes a customer-centric view, based on an analysis and understanding of customer needs and preferences, and then segments and tailors offerings or services. Taken a step further, buyer-centric strategies look at all products and services that customer groups might want and may require partnering with others to provide them.

Customer service strategies also can involve a corporation's knowledge base, Gowland explains--for example, leveraging all the different knowledge or capabilities in research or in environmental, health, and safety management. "All of those capabilities and that knowledge now have new dollar values when you can share them through the collaborative capabilities that the Internet offers," he notes.

Chemical industry e-commerce leaders emphasize how their strategies are not about technology and all about their entire businesses and their customers. "The Internet puts the power in the hands of the customer," says David Kepler, Dow's vice president for electronic commerce and business and chief information officer. "If you are building any kind of capability that doesn't have the customer in mind in terms of how they are going to behave and work with you, you are not going to be successful."

Dow's approach, like others, is driven by many goals: improving interfaces with customers, streamlining interactions with suppliers and in procurement, participating in and creating new market channels, and finding new business opportunities. The company anticipates spending about $100 million this year on e-business and has about 200 employees dedicated to the effort. Kepler estimates that about 80% of Dow's business will be conducted electronically in a few years.

By September, Eastman will have global order-entry capability, Buehler says. With more than 500 registered customers, the goal is $200 million in revenues via Eastman.com by the end of the year. But Eastman, like other companies, anticipates doing much more business through other channels, especially direct system-to-system links. Including these channels, Buehler says, about 20%, or roughly $1 billion, of Eastman's revenues will be "e-enabled" by the end of the year.

Likewise, BP Amoco Chemicals wants to have all its businesses trading online and to be procuring 95% of its supplies that way by year-end. BASF tells C&EN that 40% of its business will be online by the end of 2001 and more than 50% by 2005. And it plans to purchase as much as $1 billion in raw materials electronically by the end of 2002. To achieve these goals, the company says it will spend more than $70 million in the next two years, working with external partners and developing its own projects.

Rohm and Haas and DuPont believe that having an overall strategy gives their business units the context in which to develop customized initiatives and spur growth, while sharing experience and coordinating efforts. Mature businesses hope to see growth from increased customer satisfaction and demand; new online business development; and new offerings based on technical expertise, market access, and corporate brand.

"The Internet isn't going to change the overall demand for chemicals," comments Charles Gruber, Rohm and Haas's director of e-business. "But the companies that embrace an e-business initiative early can reap some of the productivity benefits and will be able to drive their costs down, and a lot of those savings are going to be passed along to customers," he continues.

"At the end of the day, the customer will make the choice," Buehler concludes. "So we're assembling as many options for our customers as we can so that they can transact business with us in a way that they want to transact business."

Dot-com explosion

E-commerce presents new challenges for traditional brick-and-mortar businesses. Because customers will dictate the routes, Lisa Boothe, director of DuPont's e-business leadership team, maintains that an e-business strategy must evaluate all of them. "In one case, we need a strategy for how to participate in the neutral marketplaces. At the same time, we need to have a 'businessunit.com' strategy where we think about how to present products and services to customers. There also is an opportunity for brand new business models, products, and services."

According to a study by PricewaterhouseCoopers, New York City, direct channels between companies and their customers are expected to occupy about 31% of chemical e-commerce space. Marketplaces are expected to take up 23%, while procurement sites reach 29%. The remaining 17% will be divided up among third-party sites hosting exchanges and auctions.

In 1999, third-party dot-coms were the chemical e-commerce pioneers. Many began as bulletin boards for trading, or as auction, catalog, or virtual distribution sites. To get their feet wet in e-commerce and tap into these new enterprises and their technology, leading chemical firms took equity positions and agreed to make the dot-coms their preferred trading or procurement platforms. In turn, the investments helped validate some of the new business models.

Today, more than 40 third-party sites for buying and selling chemicals have sprung up, and many more offer related services, technology, or information. Analysts from San Francisco-based Banc of America Securities assert that the "barriers to entry are low, but the barriers to success are high." Analysts and consultants believe that many dot-coms will have difficulty becoming profitable or surviving. Lack of industry experience, size, and flawed business plans are among the problems pointed out, but they also suffer from requisite low margins and from only so much business to go around.

CheMatch.com and ChemConnect run chemical exchanges. CheMatch, based in Houston, has gotten about $50 million in equity funding from industry and venture-capital investments, whereas San Francisco-based ChemConnect boasts raising more than $100 million.

CheMatch focuses on petrochemicals, bulk polymers, and fuel products. With 47 products for trading, its target is a fraction of the $800 billion annual market for commodity chemicals. In the past quarter, CEO and President Carl McCutcheon says $83 million in transactions were completed on its site, up from about $25 million two quarters ago. In one year, its customer base has grown to 371 from 31.

ChemConnect offers a broader range of products, including smaller volume specialties and fine chemicals. The site claims 10,000 registered users from 7,000 companies. Linda Stegeman, ChemConnect's senior vice president for marketing, says that the daily number of offers to sell or requests to buy is close to 1,000.

However, at either exchange, the number of companies actively trading, and the number of completed transactions, is much smaller than the number of members. And revenues in 1999 for each were less than $400,000 while expenses for each exceeded $10 million.

Despite the prodigious growth of dot-coms, the current business environment is challenging. CheMatch and ChemConnect want to hold initial public offerings of stock, but the stock market currently has a dim view of technology stocks. Both companies aspire to duplicate the earlier success of the laboratory product e-marketplaces SciQuest.com, Research Triangle Park, N.C., and Chemdex (now part of Mountain View, Calif.-based Ventro), each of which raised more than $110 million through initial public offerings. CheMatch's offering still is pending, but ChemConnect pulled its on June 30.

For now, the as-yet-unprofitable companies must subsist on cash on hand and revenues from small transactions fees--2% for ChemConnect and less than 0.5% for CheMatch--and membership fees they have charged at various times. "The economics are such that the winner has all the liquidity," admits Kevin Wenta, CheMatch's vice president for business development and e-strategy and formerly with Andersen Consulting. "You need lots of volume to be economically viable."

Winners, analysts and consultants say, will most likely be the early entrants that can attract a critical mass of buyers and sellers. Beyond that, growth may come from evolving business plans to provide more value-added services. Observers and even participants expect a shakeout within about 18 months and consolidation, with just a few of each type left standing in each market channel.

"There are a variety of approaches, but at the end of the day it's about delivering good value and whether the customers come back," Payne of fobchemicals says. By aggregating orders for more cost-effective purchasing, fobchemicals has a buyer-centric approach. Sales for the dot-com, which takes title to the materials it sells, doubled in the second quarter to $4 million.

Once a virtual distributor, Ann Arbor, Michigan-based e-Chemicals has adapted its business plan. "Frankly, getting the 'traction' as a Web-based distributor was somewhat difficult," says John Mulholland, senior vice president for strategy. Still, the company has more than 25 distributors and producers participating in its online marketplace and more than 4,000 products and 1,400 registered buyers. But e-Chemicals now leverages its marketplace in its focus on e-enabled supply chains or machine-to-machine connectivity of raw material providers, producers, intermediaries, and purchasers.

"In the future, you will see consolidation, but you'll also see clustering," Mulholland says. "There has to be an integration between the models, because industry participants will want to be able to leverage them seamlessly." The company recently signed up Eastman and Nalco/Exxon Energy Chemicals as supply-chain-solution customers targeting up to $60 million and $100 million, respectively, in sales and purchases through e-Chemicals.

Some of the many more third-party sites opening up have regional origins such as CeerChem, in Eastern Europe; ChemUnity, for European commodities; and ChemCross in Asia. Others are trying to serve specific chemical sectors such as fine chemicals--ChemFinet, ChemB2B, ChemACX, and ChemNavigator; plastics--fobplastics.com, GE Polymerland, getPlastic, and PlasticsNet; or industrial chemicals--i2ichemicals, Covalex, and ChemicalDesk.

Industry.coms emerge

The crush of recent announcements is generating skepticism about what many sites will offer that's unique and how many will come to fruition because most niches have been filled. "There's been coverage in most of the vertical segments that the chemistry industry serves," Gowland notes. In addition to third-party sites, company-sponsored sites for their own business or in related vertical markets or services--such as apparel, building materials, and logistics--are operating or planned.

Among the most significant plans are those from several groups of major chemical producers to create independent, or neutral, business-to-business sites. Although participants say the cost of building these marketplaces is high, the investment is strategic since most chemical business flows through close contractual or collaborative relationships. Third parties are expected to carry only a small percentage of chemical trade.

As e-commerce channels fill, Stegeman takes it in stride as natural evolution in the sorting out of roles, calling ChemConnect's value proposition "very consistent and compatible" with other ventures. She says that ChemConnect's approach is to be "open and allow others to integrate into our marketplace so that the bulk chemical trading needs are met."

However, it's not surprising that chemical companies want to create their own vehicles to maintain direct contact with their primary customers. "I don't see the chemical industry handing over its economic profit to the cyberworld," says Eric P. Johnson of PricewaterhouseCoopers. "It's hard to see how big chemical outfits would be willing to surrender several percent of their sales or purchase price on a long-term basis to a third-party broker."

In the short term, producers may be willing to pay something to third parties for the benefit of experiencing or learning new channels, Johnson comments. But they've not even had to pay for that, he adds, since most of the trading that has taken place has been on special terms, such as waived or discounted commissions or other incentives.

Many in the industry expect that 50% or more of chemical e-commerce will move through direct, integrated channels. Another 20% will be through corporate sites and the remaining 30% divided up among e-marketplaces or exchanges (15%), catalog or aggregator sites (9%), and auctions (6%).

An as-yet-unnamed venture referred to as "Elemica" intends to operate a neutral marketplace for the global chemical industry. It involves at least 14 leading producers and four major distributors and will enable connectivity between the enterprise resource planning (ERP) systems of suppliers and buyers. It also will facilitate customer interaction by moving business processes to a common site. Elemica is to be set up this month--with the partners spending $150 million together to capitalize it--and operational by year-end.

Unlike dot-coms vying to create traffic on their sites, "the major players immediately are able to commit volume," points out Frank Doorley, principal consultant at PricewaterhouseCoopers. Whereas paper transactions cost between $50 and $150 each, electronic transactions could cost as little as $20, he explains. "That means you've got to run a tremendous number of transactions to make money. By focusing on the fulfillment side, the major companies are dealing with 80% or more of the transactions and dollar value that flow between companies."

BASF wants to counteract what it calls the "cluttering" trend, while Dow's Kepler is concerned about "fragmentation" with the number of initiatives. "These initiatives are going to be expensive to build," says Kepler, who advocates selectivity in deciding which to support, "and with too many I'm afraid they just won't have the momentum or capability to be built, yet will hang around and slow up the progress of the industry." BASF and Dow are in Elemica.

In March, another group created Envera as a neutral business network. As of late May, Envera listed about a dozen strategic participants and slightly more that are developing membership integration or evaluating positions. The company says that connectivity is its priority and that it's working with more than 80 companies in chemical, petroleum, and related markets to develop trading member links. Envera's prototype exchange is to operate this quarter.

Two marketplaces targeting end users were announced in April. ElastomerSolutions was formed by Bayer, Crompton, DSM, DuPont Dow Elastomers, Flexsys, M. A. Hanna, and Zeon Chemicals. It anticipates a launch this quarter. Omnexus, created by BASF, Bayer, Dow, DuPont, and Ticona, expects to begin serving thermoplastics injection molders by October.

On yet another front, 14 energy and petrochemical companies are forming a global e-procurement exchange. The combined annual procurement spending of the founding partners exceeds $125 billion, and the exchange is for purchases of goods and services--as for maintenance, repair, and operations. Although the partners will hold about three-quarters of the equity, the new exchange will exist as an independent firm bringing together buyers and suppliers.

Cost savings, scale yet affordability, convenience and ease of use, extended market reach, increased transaction efficiencies, and improved supply-chain management are among the obvious advantages for suppliers and customers in the group exchanges or hubs. But Doorley notes that business-to-business connectivity is key.

"With the hub concept, everyone has to write just one interface into the hub and then the hub will act as the translation device," Doorley explains. "For every new member that the hub attracts, the richness of the network and the value to the existing players go up almost exponentially for the cost of building just one interface."

Keeping close ties

Chemical producers took notice as third-party dot-coms demonstrated the power and connectivity of the Internet, and as they stepped in between the companies and their customers. "We very quickly realized the power of our understanding of the market and the value chains that we participate in, and the relationship that we have with our customers," DuPont's Boothe says. Large companies still may need some of the technology solutions that the third-party dot-coms have to offer, she suggests, "but it's in a different role than what was starting to appear last year."

DuPont and other companies desire connectivity with old and new customers rather than surrendering it to new intermediaries. "We want to maintain very close customer contact and even would like to enhance it," says Andy DuPont, Dow's director of electronic market channels. "In the past, it was very difficult for us to justify the cost of reaching very small customers," he says. "Now, with the Internet, that cost to a large extent has been drastically reduced."

A year ago, traditional chemical distributors were upset and fearful that the Internet or new third parties would displace them. Not only have distributors now joined in the creation of business-to-business hubs, but many have e-enabled their own operations.

Two of the largest brick-and-mortar distributors, ChemCentral, Chicago, and Holland Chemical, Amsterdam, recently launched Efodia. The independent e-marketplace is to begin operating this fall and plans to expand its alliances beyond chemical suppliers. Industrial chemicals distributor Van Waters & Rogers, Kirkland, Wash., launched ChemPoint in March. And four European distributors just joined with Solvay to create AllianceChem.com and Chem- SingleSource.com.

Another site, Covalex, emerged in late April with a focus on midsized buyers of basic chemicals. Started by individuals with chemical distribution experience, the Chicago-based firm will offer a variety of tools--including exchanges and auctions--to develop a flexible marketplace for integrated supply-chain activities. "The middle market really is the hot spot," Covalex Chairman and CEO Robert Steel says, with many buyers and sellers that "can't afford their own e-commerce initiatives and are looking at neutral platforms as the way to go."

Neutrality and independence likely will be critical factors in the success, if not the existence of, new chemical industry hubs and marketplaces. "It's imperative that we maintain our neutrality," CheMatch's McCutcheon says. "We have to make absolutely sure that we don't put ourselves in any situation where competitive information is leaked." None of its corporate partners have board seats and none receive information about what goes on inside the exchange, he says. Affiliated companies also are prevented from trading with one another.

The new chemical industry ventures emphasize that they are being created as stand-alone operations, possibly to become public companies and profit centers. "The value of what these companies bring is neutrality, and neutrality comes when you form a new company that does not have an obligation back to the many parents," DuPont's Boothe says. "That neutral company can then focus on bringing a breadth of solutions to customers and needs freedom to do that."

Chemical industry participants seem reconciled to the fact that Internet-based activities will attract the scrutiny of regulators. The Department of Justice and Federal Trade Commission (FTC) have already started inquiring about antitrust and competition issues in marketplaces being created, for example, by major automotive manufacturers.

Fobchemicals' Payne and others believe that chemical e-commerce activities will "come through that analysis cleanly, because they are wise enough to know that they can't do anything other than abide strictly by the law." In late June, FTC held a public workshop to examine competition issues in business-to-business marketplaces.

"It's my firm belief that these neutral marketplaces are pro-competition," Dow's DuPont says. "You'll have competitors in a place where customers can compare them more easily, and that benefits the customers and actually enhances competition. Ultimately, if these marketplaces are not a better value proposition, customers will go elsewhere since you are not closing down the other channels."

Integration challenges

Electronic channels are making traditional chemical companies and new ventures evaluate their roles in customer/supplier value chains and understand clearly what value they add. "If there is duplication of effort, that will be driven out as the Internet makes business processes more efficient," Boothe says.

The Internet also enhances communication. "So much of what we do in commerce has to do with moving information around, and the Internet is a tremendous tool and offers compelling value," Dow's DuPont says. He'd also like to see "standards set up for the way information moves so that the various marketplaces can very efficiently talk with each other."

Technology is just one hurdle--many say the simple one--but changing corporate cultures and working together may be others. Chemical companies have worked simultaneously as suppliers, customers, and competitors for years. But as they are challenged to reach outside their walls and link with others, a new level of communication, openness, and collaboration may go beyond what many have found customary and comfortable.

"It's probably one of the biggest changes that's occurred over the past 25 years," Dow's DuPont comments. He and other managers suggest that companies will need to develop confidence that electronic channels can provide the confidentiality and security they want in transacting business and can protect historical relationships between suppliers and customers.

"But the value proposition is going to be when companies move beyond just simple buying and selling, moving information versus moving molecules," Doorley emphasizes. "There is a real integration opportunity out there. It will require, in some cases, breaking down some of the mistrust between companies." Doorley envisions codevelopment efforts, shared forecasts and planning, and connected work processes. "It's looking beyond enterprise integration to multi-enterprise integration, and industrywide supply chains rather than corporate supply chains."

John Chapman, global chair for chemicals and pharmaceuticals for New York City-based KPMG LLP, the accounting, tax, and consulting firm, foresees "a blurring of the lines" between organizations. "Companies are becoming very transparent to one another," he notes, and this increases the pressure to make sure that ERP systems are ready and optimized to support and enable participation in e-commerce. "Successful ERP implementation has always been said to be to a competitive advantage," he continues, "but now that's really heightened by e-commerce."

External linkages will expose some internal company operations to others. Rohm and Haas's Gruber describes developing a "net-ready" organization that has training, competencies, and solid information technology. Similarly, Dow's Kepler calls it preparing the company's "electronic competency." And Chapman cautions that companies need to "envision how e-business is going to change underlying work processes."

Most industry players have made substantial investments in ERP systems. For those that aren't as prepared, companies such as e-Chemicals, ChemicalsWorld, and the new OneChem will offer technology solutions that they install or may host as application services providers. "For many companies, ERP implementation was a rather arduous and expensive proposition," e-Chemicals' Mulholland says. "When you talk about e-business, oftentimes that comes to mind. But there are many models, and some are relatively inexpensive to implement."

Still, management has been willing to invest in e-business initiatives, company executives suggest, based in part on the desire to act quickly in what's considered a business imperative. "The scrutiny of the investments is certainly more rigorous now than it was six or eight months ago," Gruber says. "The criteria being used are, for the most part, the same as for other projects, although maybe the duration is a little bit longer."

Executives also say that, like other investments, there is an expectation for a return commensurate with the risk. Most add, however, that it's still too early to measure any return or offer numbers. However, within two or three years, they expect to see measurable returns and changes in company businesses.

One of the biggest returns, according to analysts, will be in the cost of doing business. According to Salomon Smith Barney, the U.S. chemical industry could save 10%, or roughly $4 billion, through reduced paperwork, lower labor costs, and improved productivity. On top of that, better supply-chain management could reduce inventories by 20%, which would contribute $1.1 billion in savings. Online procurement could save another $4.8 billion in raw materials costs. The total pretax savings would be roughly $10 billion, or 2.5% of annual sales.

Analysts and consultants generally believe that the first-movers could have advantages that may lead to differential cost structures among producers. Gowland points out that chemical companies already have made the most obvious move to change their procurement habits. However, any edge over the laggards is expected to eventually diminish. Long term, many predict that e-commerce will have a neutral to negative effect on the industry as pricing pressures drive down margins. Companies that create direct links with customers still may come out ahead with increased customer loyalty, better capacity utilization, lower inventories, and lower earnings volatility.

The impact may not be the same in all industry sectors. Many major commodities are sold under contract and may be less affected by pricing pressures, analysts say. But spot market trading and auctions, especially for more fungible commodities, have already resulted in instances of lower prices. Specialties could be the most affected if pricing becomes more transparent.

"The chemical industry is starting to experiment," CheMatch's McCutcheon says. To manage price volatility and risk, he points to what CheMatch says is the first completed online option contract, in this case for mixed xylenes. The site also recently hosted a reverse auction, which took just 30 minutes, for a one-year contract to supply Millennium Chemicals with phosphoric acid.

Despite the lack of data or measurable change today, company executives believe that all business functions and personnel will be touched and changed by e-business. And change, most managers admit, is often difficult. People will no longer handle many routine or low-value-added tasks; those will be done more efficiently or streamlined through automation. Sales jobs, executives note, will always exist because of the need for human interaction and relationship building.

Many employees probably are "going to move into higher value-added activities," Gruber says, that might include exploring new opportunities with customers. Employees may also need a higher level of skills. "A retraining of the workforce is absolutely imperative," Gruber continues. "Some people are going to be able to be retrained and others aren't. But it's really more of a talent redeployment effort than a workforce reduction."

The creation of the e-commerce venture ShipChem.com has already had a significant impact on Eastman, Buehler says. "We're outsourcing our entire logistics organization into this new company," he explains, "and the vast majority of employees who are in our logistics organization will be spun out to this new company." Buehler says the new venture will provide a more efficient way to handle Eastman's logistics needs.

E-business is "not the technology; it's not selling on the Internet. It is an integral part of our overall corporate and business strategy," Buehler says. "So the challenge for a mature, brick-and-mortar company is driving that into the very fabric of everything we do and thinking about e-business as an enabling tool for serving customers in new ways. The single greatest challenge for any of the traditional, successful chemical companies is the change required in the way that business is done."

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Top

Wide range of chemicals can be purchased online
Site name
http://www.website
  Chemical offerings E-commerce approachesa
BulkDrugs.com
bulkdrugs.com
Drug intermediates A
CeerChem
ceerchem.com
Various E
ChemACX (includes ChemSell, ChemQuote)
chemacx.com
Fine, intermediate, laboratory C
CheMatch
chematch.com
Commodities AE
ChemB2B
chemb2b.com
Fine, custom AC
ChemBid
chembid.com
Various A
ChemChain
chemchain.com
Fertilizers, pest control E
ChemConnect
chemconnect.com
Commodities, specialty AE
ChemCross
chemcross.com
Petrochemicals E
Chemdex
chemdex.com
Lab and research C
Chem-eTrade
chem-etrade.com
Specialty, research, drug intermediates AC
ChemFinet
chemfinet.com
Custom EC
Chemical.net
chemical.net
Lab, environmental C
ChemicalBid
chemicalbid.com
Industrial, agricultural A
ChemicalDesk
chemicaldesk.com
Paper, water treatment E
ChemNavigator
chemnavigator.com
Combinatorial C
ChemNet
chemnet.com
Fine, intermediates C
Chempoint
chempoint.com
Fine, specialty C
Chem-Trade
chem-trade.com
Various E
ChemUnity
chemunity.com
Commodities E
Cheop
cheop.com
Commodities EC
Covalex
covalex.com
Basic AEC
e-Chem
e-chem.com
Various E
e-Chemicals
e-chemicals.com
Various C
Efodia
efodia.com
Specialty C
Ethical Auctions
ethicalauctions.com
Fine A
1st Chemical Market
1st-chemical-market.com
Commodities, specialty C
fobchemicals
fobchemicals.com
Research to commodities C
Freemarkets
freemarkets.com
Specialties, commodities A
GE Polymerland
gepolymerland.com
Plastics C
getPlastic
getplastic.com
Plastics C
Internet Apex
intapex.com
Petrochemicals C
i2ichemicals
i2ichemicals.com
Industrial AE
PlasticsNet
plasticsnet.com
Plastics AC
Plastics Platform
plasticsplatform.com
Plastics A
PolymerSite
polymersite.com
Plastics E
Powerfarm
powerfarm.com
Agrochemicals C
SciQuest
sciquest.com
Laboratory, research C
Sequencia
sequencia.com
Custom E
Sesami.net/ChemX
sesami.net; chemx.com
Various AC
VerticalNet
verticalnet.com
Research, industrial, adhesives and sealants C
Webalog
webalog.com
Laboratory C
XSAg
xsag.com
Agricultural C

Note: Sites may have limited content. a A = auction, E = exchange/marketplace,C = catalog/procurement.

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Eastman Chemical emphasizes e-commerce alliances
Site Role and focus Involvement date
http://www.eastman.com Customer business transactions July 1999
http://www.worldwidetesting.com Equity stake in testing site August 1999
http://www.chemconnect.com Equity stake in exchange site September 1999
http://www.moai.com Uses real-time auctions October 1999
http://www.plasticsnet.com Equity stake in procurement site Late 1999
http://www.shipchem.com Creating virtual logistics site with Global Logistics Technology February 2000
http://www.webmethods.com Linking purchasing systems with Albemarle and Rayonier February 2000
http://www.sesami.com Equity stake in supply site for Singapore and Asia February 2000
http://www.paintandcoatings.com Joint venture with VerticalNet March 2000
http://www.envera.com Industry consortium for e-business transactions March 2000
http://www.e-chemicals.com Equity stake in purchasing site April 2000
http://www.ecredit.com Alliance for online credit May 2000

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DuPont targets different e-commerce markets
Site Role and focus Involvement date
http://www.webmd.com Equity stake in health care site April 1999
http://www.yet2.com Founder with other companies of intellectual property site August 1999
http://www.chematch.com Equity stake in exchange site December 1999
http://www.virtual-workshops.com Created interactive site for industry training workshops January 2000
http://www.industriasolutions.com Equity stake in site being created for fluid processing markets January 2000
http://www.capspan.com Joint venture to create e-markets for apparel, chemicals, and construction industries February 2000
http://www.rooster.com Joint venture for agriculture site March 2000
http://www.omnexus.com Industry consortium creating site for end users of thermoplastics April 2000
http://www.assettrade.com Investment in used equipment and machinery marketplace May 2000
http://www.elemica.com Industry group creating business- to-business chemical marketplace May 2000

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Dow Chemical participates in many industry consortia
Site Role and focus Involvement date
MyAccount@Dow Customer business transactions November 1999
http://www.chemconnect.com Equity stake in exchange site November 1999
http://www.sciquest.com Equity stake in lab supply site December 1999
http://www.zonetrader.com Alliance for disposition of surplus business equipment March 2000
http://www.omnexus.com Industry consortium creating site for end users of thermoplastics April 2000
No name Industry consortium to create procurement exchange April 2000
http://www.elemica.com Industry group creating business- to-business chemical marketplace May 2000
http://www.buildscapepro.com Marketplace for building and construction industries May 2000

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