Chemical Distributor VW&R Gets into Crowded Online Field
April 10, 2000
SEATTLE, Washington, April 10, 2000 -- Kirkland-based chemical distributor Van Waters & Rogers Inc. has been out of the public limelight since its parent, Univar Corp., was bought by a Dutch firm in 1996.
The company certainly didn't go away; it remains an important presence in chemical distribution, with 130 distribution centers around North America, more than 3,000 employees in the United States and Canada and about $2 billion in annual sales.
But much of the work of the wholesale-distribution industry goes on unnoticed beyond the name on the side of trucks; that's even more so with distributors of industrial goods used in the manufacture of other goods.
Now the Van Waters & Rogers is back in the spotlight because of a new venture in business-to-business commerce, currently the hottest corner of the online world.
VW&R's parent company, Royal Vopak, has established ChemPoint.com. Based in Kirkland and a sister company to Van Waters & Rogers, ChemPoint.com is an online service (although it will also offer phone, fax, e-mail and electronic data interchange ordering) for buying chemicals and tracking deliveries.
VW&R will handle the logistics and delivery for ChemPoint.com.
Royal Vopak and VW&R are part of a large-scale movement of old-line industrial companies trying to carve out positions in electronic commerce, not only for their own products but for customers and products within an industry and even in business generally.
The Boeing Co. is participating in a venture to sell airplane parts online; Weyerhaeuser Co. and two other paper manufacturers have a site in the works to sell forest products; truck manufacturer Paccar has launched a company through which customers and suppliers can order business supplies.
The chemical distribution sector is one of the most congested in the e-arena. A recent initial public offering filing by ChemConnect Inc., a San Francisco company that operates the World Chemical Exchange, lists as some of the players in the business Cematch, ChemCross, Commerx, e-Chemicals, fobChemicals, ChemPoint, ChemUnity, Cheop, FreeMarkets, MeetChina, Ventro (formerly Chemdex), VerticalNet and XSChem, as well as general business-to-business services, including Ariba, Commerce One, i2i, SAP and Oracle.
The filing warns that individual companies may launch e-commerce sites such as Envera, a consortium of chemical producers.
How then will ChemPoint stand out in this crowd?
One way is to take a niche position rather than be an all-purpose chemical market. Chad Steigers, ChemPoint.com's managing director, said his company's specialty will be "less-than-truckload (orders) that are used by a broad customer base, but a small amount is used at each account. There are a large number of products that fit that description." An example would be natural colorings used by food producers.
Such specialty chemicals tend to have longer selling cycles, require technical support and may have to be tested and customized to fit a user's specific needs and processing equipment.
ChemPoint says those chemicals are better handled by its approach than traditional distributor or manufacturer sales.
That's the other point of differentiation. Some online auctions are the equivalent of bulletin boards where buyers can post requests for quotes, and buyers and sellers are often unknown to each other until the close of the transaction. Steigers says ChemPoint.com will be designed as "an Internet enabled sales call. It's a lot more personalized touch."
Under ChemPoint.com's model, customers will get an assigned salesperson, and eventually may be able to handle sales calls and orders with a video link between sales representative and buyer.
Royal Vopak hasn't brought any partners in for ChemPoint.com, Steiger says, and if it does it won't be because of a need for capital.
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