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/consortium mix. Went live February 1998.

Skinny: Major backing from mix of Internet and industry investors. “It’s a horse race between ChemConnect and CheMatch,” notes Eriksen … So far, CheMatch claims to have moved more than $400 million worth of product through exchange and auction platforms … Operates sister site, PetroChem.net (www.petrochem.net). In late February, inked alliance with ChemCross (www.chemcross.com) — either the largest chemical E-marketplace in Asia or the guy who sang “Sailing.”

OneChem (www.onechem.com)

Details: Independent. Launched June 2000.

Skinny: Began as a trading exchange. Now offers remote hosting of supply-chain services and applications for small to midsize chemical companies. Survival, if not greatness, can be found below the radar of the big consortia … OneChem claims hosted approach can reduce transaction costs by 40 percent to 80 percent. Your mileage may vary.

ChemicalBid.com

Details: Independent. Launch date unknown.

Skinny: Auction specialist. One problem: During week eCFO monitored site, only auction posted was for 1 kilogram of capric acid. Starting bid? $2.99. In early March, site home page boasted: “0 items for sale in 6 categories!” They might want to consider removing the exclamation point … As of press time, ChemicalBid.com appeared to be kaput.

E-Chemicals (www.e-chemicals.com)

Details: Independent. Launch date unknown.

Skinny: Organ donor at this point. January acquisition by Aspen Technology brought former ICG exchange back from death’s door. Aspen now reselling site’s technology for use by private online chemical marketplaces … Moral? Many first movers developed valuable industry-specific technologies. Thus, some defunct exchanges may find life after death as technology providers to consortia — or as software companies that service them.

FOB (www.fob.com)

Details: Independent. Launch date unknown.

Skinny: No longer an exchange. With acquisition of MSDSonline (www.msdsonline.com) in March 2000, management discarded development of its ProSource raw materials procurement platform; now focused on selling material safety data sheets (MSDS) online. “Not a business model that will survive,” claims Eriksen … Since electronic MSDS is a service top chemical exchanges must provide, FOB’s owners may be hoping for an e-Chemicals-like resurrection.

Chemdex

Details: Independent. Launched September 1997. Closed December 2000.

Skinny: B2B giant Ventro Corp. withdrew life support for Chemdex in December. Company went flat line in March.

Covalex

Details: Independent. Launched April 2000. Closed November 2000.

Skinny: Consultant MarchFirst holds 50 percent stake in Bluevector, company that invested in Covalex. At the same time, MarchFirst charged consulting fees to build Covalex site. Nice work if you can get it … Launched with fanfare in April 2000, quietly shut down in November.

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