PHILADELPHIA (Oct. 17, 1:10 p.m.) — With online marketplace Omnexus going live with its site this fall, industry experts at a recent e-commerce conference came to one conclusion: There is no consensus about how the site — backed by a consortium of high-profile resin companies — will fare.
Some of the investing companies, such as DuPont, want to funnel all molding-company-related transactions through the site. Other founding members, such as Ticona, see it mainly as a way to gain new customers.
And outsiders´ opinions were all over the map — from those with high praise for its potential, to some with a wait-and-see approach. That includes some of the pioneering companies, such as online spot exchange ChemConnect Inc. of San Francisco.
"Consortia are in the honeymoon period that we were in a few years ago," said ChemConnect President Phil Ringo, speaking Oct. 10 at the E-Business for Chemicals and Plastics 2000 conference in Philadelphia. "They´ll have to be held to strong economic standards."
While Omnexus still might have something to prove, it at least is generating talk. The company wants to become the central portal for injection and blow molders wanting to buy an array of material, equipment, tooling and services.
While the site went live Oct. 2, the Atlanta-based company does not expect to offer transactions until at least mid-November, and will roll out its services gradually after that.
Several Omnexus founding members expressed differing visions of its future. Wilmington, Del.-based DuPont expects its molding customers to move to the site, said Robert Ridout, chief information officer.
While DuPont might like to work directly with its customers, those resin buyers probably would prefer Omnexus´ broader shopping mall of offerings, he said.
"It provides more of a reason for them to go there," Ridout said. "With everything they plan to have on the site, there´s a level of stickiness to it that will attract customers."
But Ticona — another Omnexus founding company — expects most current customers to use its internal ordering site, Buy Ticona Direct at www.ticona.com.
Omnexus will provide a good tool to expand Ticona´s customer universe, said Ticona Chief Executive Officer Edward Muñoz.
"In the end, different segments of customers will go different ways," Muñoz said. "Our strategic customers will stay with us and either buy online at Buy Ticona Direct or through traditional methods."
Ticona also conducts about 15 percent of its business through the GE Polymerland Web site, Muñoz said. He said he does not expect Omnexus to threaten that relationship.
At the same time, Muñoz expressed concern that most of the Omnexus-supporting resin companies did not have internal computer systems in place to link with the new player.
"With all due respect to them, a lot of (resin companies) are scrambling to hook up their systems to the Omnexus portal," he said. "We´re ready."
Several other companies at the conference, including Eastman Chemical Co. and Rhodia Inc., had not joined Omnexus as equity partners. Rhodia President Myron Galuskin defended the move. The company has joined chemical consortium Elemica, which has not gone live yet.
"We´re joining a consortium that really, at heart, focuses on supply-chain efficiency," Galuskin said. "We might participate in the others, but not as an equity player."
Consortium-founded marketplaces — such as Omnexus, Elemica and the recently launched chemical site Envera — face numerous hurdles, said Robert Koort, director of North American research at Deutsche Bank in Houston.
Competitors must trust each other to manage by consensus and not slow the process down, he said. And they must establish a level playing field that grants equal access to all the companies joining the fold, he said.
Solid financing also helps, he said. "The consortium should be self-funded, so they don´t have to go to the market when they run out of money," Koort said.
In what could be construed as validation of Omnexus, several online exchanges expressed interest in working with the company. One of those, Houston-based CheMatch.com Inc., would welcome the opportunity to link Omnexus´ catalog offerings with CheMatch´s spot exchange model, said Vice President Kevin Wenta.
CheMatch´s move to online resin-futures trading could be a selling point, he said.
"An (Omnexus) customer could punch out to a spot exchange in difficult times for long/short (resin) purchases," Wenta said.