Forest heartland takes the big leap into B2B e-commerce

By Aimee McClinchy

Friday 31st March 2000

The internet is set to become the dominant method of buying and selling in the rural sector as the forestry industry becomes the next producer to embrace online market exchanges.

Oracle has launched a worldwide exchange for the $600 billion global forestry industry, competing with local startup, the Lignus marketplace, formed by executives of the McVicar Timber Group, and a marketing site Forest
markets.com.

Meanwhile the majority owner of Carter Holt Harvey, International Paper, with Georgia Pacific Group and Weyerhauser, the three largest US forest products groups, have agreed to form an internet-based venture to cut costs in the US market.

Called fp-xchange, Oracle's exchange is a joint venture with Atlanta-based fibermarket.com, linking paper companies, brokers, buyers and suppliers along the supply chain.

It follows the global exchange Oracle built with Ford, General Motors and DaimlerChrysler, as well as several in the oil and construction industries, and precedes a site the airline industry is putting together.

The automotive industry exchange (NBR March 3 and 10) expects to process $500 billion worth of transactions through its site, and in its first week of operation, saved Ford $US14 million on a single tyre transaction.

In the same way, global forestry exchanges are set to provide significant savings for the local forestry industry, which has $2.4 billion in international sales, forms 7% of GDP and is the country's second-biggest export earner, Oracle executives said.

"These exchanges are creating the perfect marketplaces," Oracle's Australia and New Zealand director of operations Andrew Clay said.

Christchurch-based Lignus' marketplace (www.lignus.com), which allows qualified members to buy and sell online, plans to go live in late May. It has been endorsed by the New Zealand Timber Industry Federation and its 300 members.

Lignus executive John McVicar is undaunted by Oracle's move, saying there was room for more than one player.

Mr McVicar said his company, which had developed the marketplace with Christ-
church company Jade, had offshore interest and would have a physical presence in Australia before the site went live. It also planned to start up in the US within a year.

Another venture, Palmerston North-based Forestmarkets.com, is a marketing site rather than a marketplace, and promotes local forest sales over half-a-million dollars to overseas companies.

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