Chemunity - Pragmatic Procurement of Chemicals

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	Start Chemical Trading Exchange via The Internet Arnhem, The Netherlands - February 15, 2000 - The Netherlands is to become the hub for trade via the Internet in basic chemicals, known as commodities, initially for Europe but, in the longer term, perhaps even for the whole world. Through his company ChemUnity.com, Herman Rijks (36) has taken the initiative in setting up a commodities exchange for chemicals. Next Tuesday, during a conference in Amsterdam for almost 400 representatives from the chemical world, this trading exchange will open its doors. Two weeks later, Rijks says, trading should be fully underway. The concept of trading via the Internet is already attracting significant interest both from suppliers and customers. "Everyone is very positive", assures Rijks. He says that talks on the new phenomenon have already been held or that negotiations are underway with virtually all the big-name firms, such as ICI, Solvay, Shell, Dow Chemical, BASF, DSM and Akzo Nobel. The project's success is in fact already a foregone conclusion for him. The secret of his concept is, he says, the fact that the efficiency of the Internet is put to optimum use, without essentially changing today's way of doing business. "It had to be that way because the world of business in the chemical industry is fairly conservative." The principle of his chemical trading exchange is therefore fairly simple: buyers let suppliers know what they need. Suppliers then state their conditions, the best bid is confirmed within one day and the sale is concluded. Before it reaches this stage, both suppliers and customers have to be admitted into the Internet trading exchange. When they register, they have to complete a questionnaire which also involves an examination of their creditworthiness, product range and security procedures. Once through this ballot, they receive a contract to sign, which commits them actually to buying (or delivering) the goods ordered, upon penalty of a fine, which can amount to the total value of the order. Incidentally, suppliers can always rely on their goods being paid for: the NCM covers the risks worldwide. As Rijks says, "This is a world first. Not one neural chemical trading exchange on the Internet is doing this yet." One of the most significant differences from the existing (American) chemical trading exchanges on the Internet is, he says, the fact that his trading exchange takes demand as its starting point. "The Americans just put the suppliers' entire supply on the Net. This means that, if you are a customer, you have to trawl through loads of long lists." "We start with the needs of the customer. If a paint factory in Turin needs a tanker of toluene, for example, he lets us know, together with his maximum price. Our computer then channels his demand - without the price - straight to suppliers who have already let us know that they have toluene in their range. These suppliers can let us have their conditions within 25 hours. We then pick out the best offer for the customer and pass it on to him. In so doing, the customer is also immediately obliged to actually purchase the goods." Rijks has been able to interest two Dutch venture capital funds in his new trading exchange. Gilde IT Fund and Optimix are taking a 27.5% total share in the capital of ChemUnity. The rest of the shares remain in the hands of founder Rijks and his partner Mark-Jan Terwindt. A kitty has also been set aside for an option plan for (future) employees - between 30 and 40 within a couple of years. Rijks thinks that his Internet trading exchange should be dealing in around € 1000 million (over NLG 2000 million) in chemicals within five years. He then receives 1.5 to 2% commission on these amounts. Source: De Telegraaf, February 15, 2000 by Adriaan Janszen