Ariba seals Asian hub for pulp and paper industry

As one of the world's most traditional, off-line and fragmented sector, Ariba is making some headaway sealing the paper and pulp industry.

SINGAPORE -- A global digital exchange for the pulp and paper industry in Asia that aims to integrate e-Commerce in one of the world's most traditional, off-line and fragmented sector is open for business, officials of Ariba, Inc. and Andover E-pulppaper Ltd. (AEPP) reported. Keeping to the schedule of a fourth quarter live, pilot trading site on the Internet, they announced the pursuit of www.epulppaper.com, an online business-to-business (B2B) hub for the pulp and paper industry. AEPP expects to see an initial captive US$300 million per annum of transaction volume in an industry worth at least US$250 million to pass through its site during the first year.

AEPP is a joint venture between ATD.com Pte Ltd, a wholly-owned subsidiary of Alliance Technology & Development Ltd and The e-World.com Ltd. Its principal place of business is in Hong Kong.

AEPP has selected the Ariba B2B Commerce Platform to fuel the www.epulppaper quest to become the leading Asia-based megahub for the industry worldwide with an annual transaction volume of around US$1 billion by 2003. Top officials of project proponents AEPP, Ariba and Arthur Andersen inked the deal here a day before some 1,700 high rank executives gathered for the Ariba Singapore Advisory Council.

On-line marketplaces, otherwise known as B2B marketplaces, are fast becoming model for e-Commerce. Industry analysts predict that over 50% of e-Commerce transactions will be conducted on B2B marketplaces by 2004.

Ariba, a leading B2B e-Commerce platform and network services provider, was one of the earliest technology platform providers to bring e-procurement and marketplace solutions to market worldwide. Today, over 100 e-procurement sites and over 400 exchanges worldwide run on the Ariba platform, establishihng Ariba as the leader in the B2B e-Commerce space.

Rather than acting as a neutral dotcom marketplace between companies, www.epulppaper.com is putting on-line the offline bricks-and-mortar businesses of its associates and selected high-value partners. Its aim is to build critical mass in a network of allied companies integrated on-line, dominating the industry through inherent efficiencies and economies of scale.

Timothy Siddik, AEPP chief executive officer said “We will open our site and our services to selected industry leaders. “Thanks to our business track record, we understand their critical issues and challenges intimately, and we believe our hub supplies the strategies and resources to resolve them in each market segment,” Siddik said.

Siddik, also CEO of PT Suryamandiri Buana, one of the largest paper merchants in Indonesia. He is founder and chairman of PT Zyrexindo Mandiri Buana, an Intel local OEM PC manufacturer and Indonesia’s largest home-brand PC maker.

For now, AEPP focus on the lucrative packaging and container-board market.

“We export our products to West Coast in America, Middle East, Malaysia, Singapore. We concentrate right now on packaging and containerboards which contributes about 40 percent to the industry. Eventually we will move on to office paper products,” he told the Manila Bulletin. “Our client base right covers much of Asia such as Malaysia, Taiwan, Vietnam, Burma and the Philippines, even Australia.”

During the development period, AEPP will focus on member registration, content features development and initially simplified and traditional Chinese versions of the site. Some US$5 million worth of investment in technology and infrastructure has been pumped into the project. This includes the cost of the hub’s systems which is being built on the platform of Ariba.

“All of a sudden I, as the buyer or as the seller, will have a personal relationship with my trading partner and members on the marketplace. In the present set up a fragmented relationship, there is no personal relationship or whatsover being done. The Ariba platform technology now allow that relationship to happen,” he said.

He added that the on-line marketplace now allows the seller and buyer to discover variety of products and its prices in different countries.

Initially, he said they will get at least 20 of their allies or current network of contacts from Indonesia, Hong Kong and China to join them on board.