Metals manufacturers form B2B exchange

by Jeffrey BurtEight leading metals companies on Tuesday joined the growing list of industries that have created their ownInternet business-to-business exchange.04 May 2000 - MetalSpectrum.

by Jeffrey Burt

Eight leading metals companies on Tuesday joined the growing list of industries that have created their own Internet business-to-business exchange.

04 May 2000 - MetalSpectrum.com, an online site for manufacturers, distributors and customers in the $200 billion global specialty metals industry, is the creation of Alcoa Inc., Allegheny Technologies, Kaiser Aluminum, North American Stainless, Olin Corp., Reynolds Aluminum Supply Company, Thyssen Inc. and Vincent Metal Goods/Atlas Ideal Metals.

Officials from the companies expect the new site, scheduled to be fully operational by September, to result in greater market reach and reduced expenses by cutting the cost of materials and the amount of inventory sitting in warehouses.

Under agreements among the eight initial partners, the electronic marketplace will give all parties in the supply-and-demand chain equal access to a wide range of specialty metals, from aluminum and copper to stainless steel, brass, nickel alloys and titanium.

Initial offerings
Initially, MetalSpectrum.com will include a prime metals catalog, which will be a comprehensive product listing; an MRO catalog, which will allow companies to buy maintenance, repair and operating supplies; and forward and reverse auctions, where companies can buy and sell products. The latter also will serve as a platform for elec-tronic requests for quotes.

Eventually, the site will provide support for transactions, including financing and reporting services.

The group has yet to decide on the technology that will run the site. That decision will be announced in two weeks.

MetalSpectrum currently is being run by a board that comprises representatives from each of the eight partners. Robert Weatherbee, the interim director of the electronic business group at Alcoa, has been named acting CEO.

During the announcement in Atlanta, officials with the companies said MetalSpectrum will be a neutral site that will be open to all buyers and sellers with no preferen-tial treatment to any of the partners.

One analyst said the partners have one of the key components for such a venture - deep expertise in the market and supply chain.

"We'll have to wait until September to see how this all works out," said Nelly Zaharinov, an analyst of the supply chain services markets with International Data Corp. in Framingham, Mass. "They've committed to the plan. Now we have to wait on the execution, and that's not easy."

The announcement by the metals companies follows a number of similar electronic marketplace partnerships, including two sites in the steel industry, MetalSite.com and e-Steel.com.

On Monday, a dozen computer makers and suppliers -- including Compaq Computer Corp., Gateway Inc. and Hewlett-Packard Co. -- announced a $100 million plan to create an open exchange to increase the efficiency of their supply chains.

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