ATLANTA — The plastics industry business-to-business marketplace has expanded, with machinery maker Engel Vertriebsgesellschaft mbH taking an equity stake in Omnexus, joining the portal's mainstay of resin producers and sellers.
The addition of the Schwertberg, Austria-based machinery company means processors looking for presses, parts and detailed information on the hardware can go to the same source where they can buy their raw materials, said Mike Thaler.
Thaler, global director of marketing and branding for Omnexus, spoke April 3 during the Society of the Plastics Industry Inc.'s Structural Plastics Division conference in Atlanta.
"We're just looking at how [to] make the business easier for everybody," Thaler said.
Engel is the 14th plastics supplier to take an equity stake in Omnexus. The site's other equity partners include resin companies, compounders, distributors and additives suppliers.
Selling molding machines will not be the primary focus with the addition of Engel, said David Jukes, senior vice president of sales and marketing. Instead, Onnexus is adding software to allow processors to narrow machinery choices before linking to a company and making a purchase, said Jukes, based at Omnexus' U.S. headquarters in Atlanta.
"They might want to sort through platen sizes, tie bars, all-electric machines and see all options side by side," Jukes said. "Then, they'll send [requests for quotes] to manufacturers."
Customers also can order spare parts for existing machines on the site, he said.
But even with Omnexus' growth, industry consultant Roger Jones of Franklin International LLC warned that the bulk of e-based business platforms have not panned out.
"What you've heard so far has included a lot of hype," said Jones, himself a partner in Poly - merPlace.com, an online plastics information and development Web site. Jones is former owner of resin distributor Franklin Polymers Inc.
Most independent business-to-business sites will fail, he predicted. Only two or three strong operations in a given industry segment are likely to survive.
Just consider, Jones said, the number of Internet businesses launched during the past few years that have fallen by the wayside. Most others that remain in business still are not making a profit but rather list their financial success by their ability to "reduce their cash burn."
Some of those services still have a lot to offer, though, he said.
Internet businesses offer an all-day, any-day buying option not offered through standard sales practices, he noted. In addition, they have done well at linking buyers and sellers that never have done business together before.
But once those companies link up and establish a good relationship, there is little to bring them back to the Web site — and generate the online sales that e-businesses feed off of, Jones said.
One recent survey noted that 85 percent of Internet sales take place between pre-existing buyers and seller, Thaler said. The Web still offers a chance to reduce overhead.
"People are looking to e-procurement to improve their bottom-line costs, without layoffs or plant closures," he said.
Jones agreed the Internet will become a strong tool in the future, but it is not there yet.
"We're not really seeing significant quantities of polymer being sold that way," he said. "But we will."
As prices drop for the computer hardware, software and training needed to support Internet business platforms, more companies will sign on, Jones said. The most successful will integrate a purchasing program that links every part of the system, from corporate offices that pay the bills to the hourly workers who need a steady supply of resins to mold parts.
E-business industry will continue to grow and adapt, he said, but be prepared for changes.
"Systems are changing; they're consolidating," Jones said. "It's a wild ride, it's a fast one and we don't really know where it's going."
Plastics News senior reporter Joseph Pryweller contributed to this report.