PEP Review 2004-13
Online Trading for Chemicals: Status Outlook
Published April 2004
Five years ago, the concept of online trading in chemicals was a panacea. Pushed by both fear and greed, companies threw massive sums of money and management time into a wide range of ‚e-business’ ventures. Many of these subsequently failed, which caused online trading to become somewhat of a pariah, at least behind closed doors.
This study concludes that both the initial optimism and the ensuing pessimism are exagerated. Use of the Internet in the chemical industry has made tremendous changes in communications. Compared to five years ago, vastly more information is available – immediately, anytime, anywhere and at minimal cost. However, the Internet has not made major changes in transactions. In fact, despite massive investment and effort, it is still unclear whether Elemica, the last survivor of the transaction hubs, will survive.
In communications, online business is a performer, and it has plenty more potential to be realised. This is where management should focus its attention.
In this report – aimed at commercial managers in the chemical industry – we review the experimentation with and assess the current status of online trading. It is organized into five main chapters:
• Overview of online trading in chemicals
• More detailed look at online selling
• More detailed look at online buying
• Costs/economics of online trading
• A look to the future