Polymerupdate - India and International News Listing for Polymers and Petrochemical industry.
  +(91-22) 61772000 (25 Lines)
   |   GST ID : 27AAECS6989F1ZS
   |   CIN : U72200MH2000PTC125470

In the Press

Big hasn't proved better Modern Plastics International,February 2004 Matthew Defosse and Robert Colvin

But the demise of Omnexus, supported by some of the largest plastics suppliers in the world, doesn't appear to discourage other e-business startup

Hope springs eternal, at least in e-commerce. In early December, as materials platform Omnexus was closing its sales portal and selling off other components after less than four years in existence, officials of startups FairMoulds.net were exhibiting for the first time at the EuroMold exhibition in Frankfurt.

FairMoulds.net touts its platform as a low-cost means for mold makers and processors to sell new or used molds using the Internet to attract the buyers.

E-commerce is growing exponentially in some countries and markets but can any of the firms on the plastic side make money at it? At FairMoulds.net, selling firm pay € 100 to list a mold for six months; buyers pay nothing, and deals are closed offline so sellers can be assured they are not selling to their rivals. Survival on € 100 for each listing? "We'll make our money through the volume of sales," says Maksym Skvortsov, a native of Russia and the firm's sales manager for Eastern Europe.

Just more than 650 items were listed in early December. He says the firm sees huge demand for its service on the buy side in Easter Europe (especially Russia), India, and parts of Asia; and on the sell side in Germany and other highly developed markets. "Processors here (in Germany) usually make complicated parts and cannot continue using a mold with a flaw. But their old molds are of great interest in these other countries," he explains.

Omnexus' demise makes a pure material play on a global scale look unlikely, at least in the short term. Only the hottest of the consumer sites such as amazon.com have reported profits, and then only recently; so how could a site serving a complicated market such as plastics processing have a chance? In end-use markets, there are a number of e-commerce sites that match plastics packaging processors with their customers; www.webpackaging.com, for instance, used by many packaging processors and in service for seven years. In December that firm developed new online products catalogs with enhanced search facilities for packaging producer Rexam. But what works for packaging has not translated to other end-use markets.

Judging from the few independent e-outfits still focused on the plastics industry, the Internet as a means of sourcing materials, molds, and equipment seems to be most accepted by processors using smaller or more targeted outfits.

In th U.s. the longest-standing e-business for plastics is Polysort (Akron, OH). Formed in 1995 as an information exchange, it has transformed itself into a successful provider of hands-on sales and service, something only possible because all of the processors purchasing materials through its Private Resin Group Purchase program are located in eight states in north-central and northeast U.S. The program is open to processor in those states with at least $3 million in annual sales. For processors in Ohio, the site also has a group-purchasing program for electricity and natural gas.

Many users of the site, including processors and compounders, also unload unwanted materials via the site's spot exchange, www.polymersite.com.

E-sales growing, says ChemConnect At independent e-marketplace ChemConnect (Houston, TX), Tim Fetters, VP of Negotiation Solutions, says the site, continues to see growing use of its plastics trading platform. "The resins and polymer additives (sales and auctions) continue to grow at a steady pace. We've seen double-digit growth in packaging-related auctions since May," he says, without specifying from what base that growth is achieved. Users of the site can either run their own auction, or have ChemConnect run one for them.

Fetter says sell-side auctions of wide-spec commodity plastics and rubbers are most popular. He says auctions are split fairly between sellers and buyers. "In the aggregate, ChemConnect customers are still averaging 8% to 10% savings on direct materials," he says.

Selling materials or molds is not the only service processors are eager to have. Distributing current regional pricing information is a major part of earnings at sites such as Turkey's www.chemorbis.com and India's www.polymerupdate.com. The latter also serves as a marketplace for classified job advertising, and a news source.

Mirza Kadic, sales director at ChemOrbis, says pricing data plays an especially significant role among Turkey's processing community since almost all of the polymer consumed there (with the exception of that produced by Petkim, the lone Turkish supplier) is bought on the spot market. He says turkey is the second-largest spot market for plastics, following China.

"We have learned from the e-commerce systems in Europe, which were high spending high overheads and proceeded to go belly up," he says. The three-year-old firm updates pricing information twice daily.

Polymerupdate.com is in the midst of a five-year contract to provide Asian pricing data to Bloomberg, and has a contract for similar services with polymertrack. Others, including Dow Jones and Bridges, have approached the firm about acquiring data.