Global polypropylene leader Basell Polyolefins Co. NV has gone back to the future and found early success with Alastian, its Web-based business channel.
Alastian wrapped up its first year of business in North America in September, with full-year sales of more than 20 million pounds of PP, business leader Elizabeth Bozzer said in a Sept. 14 phone interview.
About 85 percent of that business came from new customers, with the remainder coming from existing customers switching to Web-based buying, Bozzer said.
``The first half of the year was a little slow, but we got a good push in the last six months, especially after exhibiting at NPE,'' she said. ``Our target market was those processors who were buying from other producers or from resellers and brokers.''
That first year included making adjustments on the fly, such as altering delivery sizes from rail car only to bulk trucks and boxes after hearing numerous customer requests.
>From the start, Alastian customers received volume discounts after purchasing 190,000 pounds of PP.
Currently, between one-third and one-half of Basell's entire PP lineup is available through Alastian, but Bozzer said that selection might be expanded in the service's second year.
Alastian also offers technical service at an additional cost, although not a single customer made the request in the first year.
``Most of our customers know what they need to do with the material, so they don't need a lot of technical help,'' Bozzer said.
Basell found that its Alastian customer mix was slightly more skewed toward injection molders in its first year than its direct-buying base was; about 80-85 percent of Alastian's first-year sales were to injection molders. Basell also found that some of its direct customers were making noncontract spot purchases on Alastian every month as well.
Moving into 2007, Bozzer said Alastian's European unit might test loyalty-type bonuses, which provide additional discounts to customers that buy PP via Alastian for several consecutive months. If it succeeds in Europe, the program might be added in North America.
Prior to launching Alastian in Europe in 2004, Basell's e-commerce experience was limited to conducting auctions of wide-spec material on the firm's Web site. Alastian was an attempt to penetrate the market on different levels, Bozzer explained.
To date, the result has been a Web-based model that evolved a few years after all the turn-of-the-millennium Internet hype died down.
``I think when other companies rolled out their e-businesses, it was just another way to place an order,'' Bozzer said. ``We decided we wanted a system that would allow a customer to get something by doing the manual work of placing an order. Now, we're seeing that continue to grow.''
Basell, based in Hoofddorp, the Netherlands, ranks as the world's largest PP maker with almost 18 billion pounds of annual capacity. The firm posted sales of more than $10 billion in 2005 and has North American headquarters in Elkton, Md.