They had only just begun. But the bloom already is off the rose for two budding Internet trading exchanges in the plastics industry.
EPlast.com planned to go live in June during NPE 2000 as a global online resin distributor, bundling materials under a private label.
Another new company, Allplastx.com Ltd. of Dundalk, Ireland, was supposed to become one of the first online plastics trading sites in Europe when it launched in May.
So much for expectations.
EPlast, based in Menlo Park, Calif., instead delayed its launch and now has gone dormant while deciding its next move. And Allplastx, while still running an informational Web page, has been thrown into turmoil by the loss of venture funds and the defection of its chairman. The company is uncertain when it will trade plastics online.
Both came with street credibility, luring top executives from resin companies and end users. But both fell victim to funding problems — due to a stock market that has hardened its heart — and to heightened competition.
EPlast fell to earth before it even started. The company, started by Menlo Park-based resin distributor Chemtex International Inc., had a strong management team that included President Bill Hughson, a former GE Plastics executive, and Tom Connors, ex-worldwide resin procurement manager with Hewlett-Packard Co.
Hughson and Connors have left ePlast, although Connors still has a consulting contract until the end of September. Connors said he is considering launching another new plastics site.
"It's quite a busy space, yet nobody has set upon how to do it right," Connors said. "Not a lot of traction is being gained yet."
Saeed Amidi, Chemtex president and chief executive officer, plans to relaunch ePlast by the first of the year. But it could start as a scaled-down version to distribute Chemtex resins, while Amidi considers plans for what he calls a "Web-enabled mega-distributor" that handles all shipping online.
Amidi said lack of capital has scotched the plans of many wannabe Web portals.
"Before, you could sell a dream, raise a lot of money and then go with an (initial public offering)," Amidi said. "Now, the market doesn't reward you unless your company actually makes money. That's the route I'm trying to take with ePlast."
Amidi added that he couldn't afford "expensive heavyweights" like Hughson and Connors in the interim.
Allplastx also offers a tale of struggle. The firm's London-based investor pulled out two days before it was supposed to transfer money to the Web venture, said Allplastx co-founder and company director Peter Agnew.
"It put us in serious trouble," Agnew said from the Dundalk offices of his consulting firm, PEI Ltd. "We are in discussions with a number of potential investors in the U.S. and Europe. But it all takes time, and we don't have a lot of it."
So the company hits the money trail tailed by creditors, Agnew said. In the best-case scenario, the company hopes to have new funding by late September, he said.
Meanwhile, AllPlastx Chairman Huw Radley resigned. Radley formerly held senior positions at GE Plastics, AlliedSignal Plastics and M.A. Hanna Co.
Allplastx is attempting to become an independent auction and catalog-sales site for resins, Agnew said, and has resisted accepting investments from resin companies.
"In the last number of months, resin suppliers have been knocking down our doors," he said. "But it blows our model."
The gloomy scenario for the two dot-coms was forecast by analysts. Cambridge, Mass.-based Forrester Research Inc. predicts that fewer than 200 business-to-business trading sites will survive by 2003. Most buyers and sellers currently are selecting the right strategies.
That has led to widespread confusion — and to a coming purge, the Forrester report said.
The blood already is starting to spill for plastics-based portals.
Pryweller is an Akron-based senior reporter for Plastics News. His beats include e-business and mold making.