This Year’s Model

While independent exchanges are stalling, industry-led trading hubs are gaining in popularity. Here's what we found when we examined E-marketplaces in four industries: metal, chemicals, paper, and energy. (

Details: Independent. Went live April 2000.

Skinny: backers include venture capitalists Divine interVentures, Dot Com Ventures, and DS Capital, as well as investment house Bear Stearns … Smaller, multi-metal player uses UK spelling for site name. Operators also say, “What’s for pudding?” when they want dessert … Company inked deal in September with (, virtual gateway to Russian metal industry … Site was redesigned in October, just six months after launch … When you type in, you get bounced to It’s a strange world we live in.


Big Picture: This $1.7 trillion global industry has everything: two consortium exchanges heading for a showdown, two independent exchanges in battle, and dead and dying exchanges littering the ground. What’s more, neutrals like FreeMarkets ( may be eyeballing the commodity side of the chemicals market. Trouble? Possibly. Vertical exchanges may provide useful services, but FreeMarkets is a powerful player.

Elemica (

Details: Consortium. Scheduled to go live around press time.

Skinny: Gorilla of chemical industry exchanges. Backers include Dow and DuPont. “They could walk away from this investment and it wouldn’t even show up on their bottom line at year-end,” says Eriksen … Elemica’s CEO came over from Paper-Exchange — more proof that independent exchanges are going out of favor … With name like Elemica, site should remove unwanted freckles.

Envera (

Details: Consortium. Launched March 2000.

Skinny: More dynamic than Elemica, Envera owned by — and serves — smaller chemical companies. But then, smaller than Dow includes most planetary objects … Envera playing delicate game, says AMR’s Eriksen. If site can lengthen its lead and gain more independence from partners like Enron, it could challenge Elemica and capture sizable market share … Envera now supplies dry van trucking and other logistics services.

ChemConnect (

Details: Consortium. Went live June 1999.

Skinny: Users seem to like it. “We tested a lot of sites for global reach, suppliers, and so forth,” says Angelo Brisimitzakis, vice president, global supply chain for Great Lakes Chemical Corp., which uses ChemConnect. “Except for a few strategic materials, every other material in balanced supply or long supply is posted on [ChemConnect's] World Chemical Exchange …” Investors include SAP Ventures, part of giant ERP specialist SAP AG … Since early 2000, site has operated corporate trading rooms — private auctions for customers. Focus remains all chemicals, though. (


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