Asian steel producers are attempting to prove the U.S. does not have a lock on innovation in the hot business-to-business electronic commerce arena.
A group of 20 steel producers and steel processors have joined together to launch an ambitious portal aimed at capturing a sizable share of the Asian steel market, before U.S. competitors can get a foothold in the region.
ISteelAsia.com was launched in December 1999 by a group including Beijing Shougang, China's second-largest steel mill, and Amsteel, the largest producer in Malaysia. Andrew Yao, chairman of Van Shung Chong Holdings and head of the consortium, said he is confident iSteelAsia.com will be able to secure as much as $5 billion of business from the region during the next three years.
"We believe the Asian steel market still has a significant growth potential, as we see a clear sign of increasing demand from the region," he said. "Web technologies will open up additional growth opportunities."
Yao said Asia already accounts for about 45 percent of global steel consumption, amounting to more than $300 billion in annual spending. Worldwide, the steel market is believed to be worth $700 billion.
Membership in the exchange is free to buyers and sellers. ISteelAsia.com will earn revenue through a 1 percent transaction fee, as well as through value-added services. Yao said that over time, he expects the exchange will earn a larger share of its revenue from value-added services, such as payment processing, logistics and delivery.
The Reuters news service has been contracted to provide news and information services to the exchange, and Yao said iSteelAsia.com will operate in multiple languages, including English, Chinese and Japanese. Other features being offered to members include an industry bulletin board, a calendar and online auctions.
Since its launch, iSteelAsia.com has registered more than 300 corporate and individual users, Yao said.