Six of the country's conglomerates have banded together to put up a P1 billion joint procurement Web site firm,
the first of its kind in Asia that allows online access to their suppliers to bid for the supply of their requirements.
MANILA, 19 June 2000 (Manila Bulletin) - The six conglomerates are the Aboitiz Group, Ayala Group, Gokongwei
Group, Lopez Group, Philippine Long Distance Telephone Co. and United Laboratories.
A memorandum of understanding that will govern the formation of the proposed electronic procurement company with
an initial capitalization of P1 billion will be signed today by the conglomerates to be witnessed by President
"This is a major event of what IT, e-commerce means and I hope this will be replicated by other business firms,"
Trade and Industry Secretary Manuel A. Roxas II said.
To ensure that the procurement Web site is a working one, each one of the participating conglomerates is committing
to a "significant amount of procurement".
Roxas did not reveal the amount the conglomerates will source from the Web site but said that the conglomerates
require the "supplies of paper clips to cables ... you just can imagine what these conglomerates purchase
that run to billions."
"This Internet-based procurement system has narrowed down the supply gap in the supply chain, eliminate the
middlemen and reduce the paper works," Roxas said.
Roxas said the establishment of a procurement Web site has provided every supplier both local and foreign equal
chance to bid via the Internet.
As buyers, SMEs will have greater discounts created by the volume of all buyers, and by using the Internet, they
will lower the costs associated with the purchasing process itself.
"This is also a major break after the passage of the E-Commerce Act," he said.
The still unnamed firm will be managed by an independent professional group. The shareholders agreement is still
in the process of final formulation for approval by the respective boards of the founding companies.
Based on the MOU, the group is looking at a start-up operation by November this year.
The local procurement Web site of the six conglomerates is the local version of the procurement Web site put by
the three US car giants for the supplies of parts and components. GM, Ford, Daimler-Chrysler have formed the Covisint
In aerospace, Boeing, Lockheed, Raytheon and British Aerospace have organized their own consortium.
In electronics, Hitachi, IBM, LG Electronics, Matsushita Electric, Nortel Networks, Seagate Technology, Solectron
and Toshiba have recently launched a similar procurement Web site.