Carter Holt spends $1.8m on internet-based market

By PAULA OLIVER

Century-old Carter Holt Harvey has made its second investment in an internet-based marketplace, spending $1.8 million to become part of an Australian office-supplies, IT, travel and hotel consortium.

The investment will see much of Carter Holt's indirect supply purchasing, such as corporate travel and IT hardware buying, done through Sydney-based marketplace Cyberlynx.

Cyberlynx already counts Telecom, Lion Nathan, Woolworths, EDS Australia and the Commonwealth Bank as shareholders, and has pulled several preferred suppliers on board.

The investment will be made out of Carter Holt's $15 million venture capital fund, and comes just three months after the timber giant took a 49 per cent stake in internet freight hub e-cargo. Chief executive Chris Liddell said it was likely that more than $124 million in spending would be channelled through the marketplaces.

General manager of procurement and distribution Ken Humphrey said the move would cut costs through gaining greater buying power as a member of a consortium.

"If we spent $10 million a year on travel, we would now feel the effect of aggregating that with the spend of the other shareholders," Mr Humphrey said. "Going to the market with $100 million of business instead of $10 million is likely to result in keener prices."

Carter Holt's moves towards ebusiness have been eagerly awaited by the marketplace industry, and many local players have been competing to secure its business.

Mr Humphrey said that rather than being the final verdict on Carter Holt's role in internet business, the Cyberlynx connection was just one of a series of moves. More would be revealed in the future.

The decision to join an Australian-based market rather than one of the many Kiwi ones on offer was made because Carters spent as much as 35 per cent of its procurement dollar in Australia.

Cyberlynx's shareholders were all considered to be "transtasman" players, and it intended to begin operating in New Zealand in coming months, Mr Humphrey said.

Cyberlynx claims it will manage $A2 billion ($2.48 billion) of spending in 2001. Its main competitor is considered to be Australian-based corProcure, which counts Foster's, Goodman Fielder and Qantas among its members.

Mr Humphrey said it was becoming clear to companies getting involved in e-business that there was not one solution to fit all situations. Instead, major companies were likely to become involved with several markets.

There is potential for Carter Holt to become a supplier to the Cyberlynx consortium through its Tissue division in the near future, but at the moment most of its activity will be buyer-related.

Mr Humphrey said that Mr Liddell was encouraging innovation throughout the business, and as a result staff were keen to embrace new concepts and try things such as e-business.