Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
      • 2023 winners
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Bioplastics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
March 20, 2000 01:00 AM

Getting the goods (and bads) on e-markets

Don Loepp
Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    NEW ORLEANS — A growing number of Web trading forums are spending millions of dollars to woo plastics processors and suppliers to buy and sell products online. The market makers are creating Internet sites that are easy and inexpensive to use, chock full of features, and rich in content.

    But skepticism remains high among many potential customers.

    Maureen Steinwall, president and owner of Steinwall Inc., a Coon Rapids, Minn., injection molder, thinks e-commerce is the next Y2K — which, despite all the hype, turned out to be a bust.

    Her firm uses a facsimile order process now, while at least one major resin supplier wants an automated system. Steinwall, interviewed at the recent molders e-business conference in Las Vegas organized by the Society of the Plastics Industry Inc., objects to the plastics industry spending "$15 million to obsolesce the fax machine."

    You might expect processors who attend a forum devoted competely to e-business would be enthusiastic participants in online commerce. But even among those who attended Plastics News' recent e-business briefing in New Orleans, signs of reluctance were obvious.

    At one point, for example, a panel of executives from well-known companies, including Nypro Inc., CertainTeed Corp. and Portola Packaging Inc., was asked whether any of them had ever purchased resin on the Web.

    All said no.

    Later, a question-and-answer session with a panel of market makers nearly became fixated on processors' complaints about their experiences with or perceptions of online auction sites.

    Several processors complained they had either lost business through Web auctions, or managed to keep contracts only by accepting huge price cuts.

    The market-maker panelists who sponsor online trading and auctions were prepared for the complaints.

    "The Internet is not going away," said Brad Hafer, vice president for corporate development at SupplierMarket.com in Burlington, Mass. "As we all know, the plastics industry is highly fragmented. The buyers clearly do have the power.

    "It will be those of you who understand the dynamics and understand the rules who will be successful suppliers in the future."

    Jim Zuffoletti, director of market making and diversified manufacturing for FreeMarkets Inc. in Pittsburgh, offered examples of how processors have used online auctions to their advantage.

    "An injection molder to the medical industry in the Midwest found out about a business opportunity in electronics, and ended up with $3 million or $4 million in new business," he said. "I've seen that happen again and again."

    Zuffoletti added that when FreeMarkets started five years ago, some original equipment manufacturers told him they were worried their suppliers would bid projects to ridiculously low profit levels. That has happened, he admitted, but he advised processors to be fully informed about any project before submitting a bid.

    "If you feel you have a lack of information so that you can't accurately quote, make sure you make noise," he said. "Prior to participating, know your bid. Don't go below your bottom line."

    Other market makers that don't concentrate totally on that sort of bidding argued that the plastics industry isn't always the right place for online auctions.

    "People still value relationships in this industry," said Jim Morelli, vice president of sales for Commerx Inc. in Chicago, developer of the PlasticsNet.Com e-marketplace.

    Morelli said Commerx has tried to create a procurement system to facilitate existing relationships among suppliers and processors, not replace them.

    "There are not generics yet, I don't believe, in this industry," he said.

    Nevertheless, several sites that concentrate on buying and selling chemicals, including plastic resin, are working hard to develop a market for trading commodity plastics.

    "We have developed a liquid market through certain grades, but believe me, it's missionary work," said Don Churchman, vice president for plastics at CheMatch.com in Houston. He added that some plastics resins are already commodity products.

    Churchman also addressed concerns that Web exchanges will make resin distributors obsolete.

    "In our opinion, the distribution function in the food chain is a very important one," he said. "I think the distributors will still flourish. I think the distributors need to focus on the best e-commerce models for them."

    Churchman and other market makers emphasized the new features that they're constantly adding to their e-commerce Web sites.

    "We're trying to design a platform that is user-friendly and will bring you value. If it doesn't bring you value, at the end of the day, you won't use it," he said.

    Bruce Gordon, an associate partner in the chemicals practice at Andersen Consulting's Cleveland office, pointed out to processors that the Internet market makers have access to millions of dollars in venture-capital and investor money right now. In a sense, those investors are wagering that the plastics industry will embrace electronic business.

    Indeed, three of the panelists' companies — Commerx, CheMatch and SupplierMarket — have filed registrations for initial public offerings in the past eight weeks. FreeMarkets went public last year, and an IPO from ChemConnect is anticipated.

    George Avdey, vice president for plastics sales at ChemConnect Inc. in Houston, echoed Gordon's sentiment about the cash available to market-maker companies. He noted that the market makers have "huge dollars that they can tap into now."

    Avdey urged processors and suppliers to try online trading and to suggest ways to improve the Web marketplaces.

    "We're making the investment in order to make these marketplaces liquid, and then scale up fast," he said.

    RECOMMENDED FOR YOU
    Hoenig named Plastics Pioneers Association president
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Treaty talks stumble on debate over resin production cap
    2
    GM, Stellantis give $15M lifeline to insolvent supplier
    3
    Tekni-Plex starts $8.5M medical expansion in Costa Rica
    4
    Plastics additives one focus in Paris treaty talks
    5
    Resin Prices
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
          • 2023 winners
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Bioplastics Live
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified