PracticeConsultingNet trading frenzy.

Net trading frenzy.

Now chemical giants follow fashion and join online buying exchanges

Small and medium-sized businesses in the UK could save up to #24bn-a-year by taking advantage of e-procurement, according to research due to be published tomorrow. The report, by think-tank London Economics, comes as major players from the chemical and textiles industries set up and join an electronic trading exchange in a bid to boost sales and slash millions from supply budgets. UK petrochemical and oil giant BP Amoco last week gave its support to a chemical e-procurement site ready to go live in July and carry a market worth $400bn. And Swedish-based TextileSolutions.com started trading last Thursday with 150 members using a $30m online exchange, promising a 30% cut in costs. Clothing chain Gap has also joined the World Retail Exchange, which includes UK chain Marks & Spencer among its 17 members, to improve global purchasing clout. The developments have major implications for suppliers across these sectors who risk losing market share if they fail to get involved in the projects. The rush to benefit from huge online savings comes as an automotive sector survey released last week by Big Five firm PricewaterhouseCoopers estimated e-procurement sites could bring the industry savings of $3,000 per vehicle. BP Amoco is one of a dozen chemical heavyweights who have pledged to inject a total of #150m into an independent business-to-business e-commerce company that will manage the trading site. Big names in the group of 12 include US goliaths Dow Chemical and DuPont, Mitsui Chemicals, Sumitomo Chemical and Mitsubishi Chemical of Japan and Germany’s BASF and Bayer. A BP Amoco spokesman said: ‘The company will have a strong supply chain focus and, unlike other internet chemical market exchanges, it will concentrate on contractual sales that represent most of the worldwide chemical marketplace today.’ Boo.com collapse, page 4.

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