Timber firm plans radical switch into e-commerce

By Adam Gifford

Dead-end sawmilling company Paynter Timber Group has secured the services of a senior executive of Qwest Communications, one of the internet world's most powerful companies, to help its transition into e-commerce.

At an extraordinary general meeting in Christchurch on February 23, the listed company will ask shareholders to approve plans to sell its timber assets and buy start-up Eforce from founder Mark Fulton.

Paynter Timber will rename itself Eforce and install Mr Fulton as managing director.

Chairman Richmond Paynter said the company intended to appoint Guy Cook, internet services vice-president of Qwest Communications, to the Eforce board.

Qwest, which is listed on the New York Stock Exchange with a market capitalisation of more than $US30 billion, has the most advanced fibre-optic network in the United States, and is developing fibre networks in Europe and north Asia.

Before joining Qwest, Mr Cook founded Colorado SuperNet, the largest internet service provider in the Rocky Mountain Region.

He has also worked as staff director at the US House of Representatives and set up the South African Internet Corporation.

Mr Fulton and Mr Cook studied marketing together at Denver University in the 1980s.

"I approached him to get involved. We've been through our operating model, and while it's different from a US model, he's happy with it," Mr Fulton said.

He said Mr Cook was taking an active role setting up the company via e-mail, and he would be in New Zealand for the EGM.

Mr Fulton, a New Zealander, has a bachelor's degree in finance and marketing and an MBA in finance from the University of Colorado.

He worked as United States financial controller for deer fence manufacturer Langley Industries and set up a European subsidiary for deer fence company Solidrock before returning to New Zealand to do a diploma in internet technology at the National College of Design and Technology in Christchurch.

"I was looking around for ways to get involved in the internet, and was initially going to do an online softwarehouse," Mr Fulton said.

"It was nearly ready to launch when I decided the traditional e-tail model, the bricks and mortar store on line a la Flying Pig, was not the way to go."

Mr Fulton had done consultancy work for Mr Paynter's private company, and brought to him the idea of turning the public company into an "infomediary portal" or internet middleman which facilitates connections and transactions between buyers and sellers.

"The power of the internet is the ability to communicate with people at low cost," Mr Fulton said.

Because Eforce will be a public company, Mr Fulton believes shareholders will have a vested interest in using its services.

"Once you bring a lot of people together you create a force of people and use that group to negotiate buying power."

Users will be invited to register as members, who will receive special offers on products and services.

Under the proposal to be put to shareholders, Paynter will buy Eforce from Mr Fulton for $250,000.

Mr Fulton will be issued 1 million Paynter Timber shares and 2 million share options which can be exercised at 25c each.

An additional 4 million options will be available for other Eforce employees.

Present staff include creative director Paul Fairbarn, who founded Christchurch web design and multimedia company Imagic; software development manager Michael Densem, owner of e-commerce firm Creative Digital Design and one of Mr Fulton's teachers last year; his partner in Creative Digital Design, Joe Kerans, as online marketing manager; and former Clearview staffer Mathew Absalom-Wong, as web designer.

There will be a cash issue of one new share at 25c for every six shares held.

The renamed company will issue 25 million share warrants. People registering the site can buy the warrants in blocks of 500. They qualify to turn those warrants into shares, at a price still to be set, by buying products or services through Eforce.

The idea of this is to create 50,000 shareholder-members.

The first of those services were announced yesterday. They include:

* Powerchoice, a tool which allows Eforce members to compare the rates of their electricity provider with rates of other local providers. Links are provided to help them switch suppliers on line.

* Amazon Freightlink, a system of bulk-freighting members' purchases from online book and CD store Amazon.com.

* Subscribe Now, which allows customers to subscribe to a range of different magazines from around the world.

* Co-Buy, a New Zealand and Australian version of US sites such as accompany.com and letsbuyit.com. Products are advertised with a price which drops as more customers indicate they are prepared to buy them.

Mr Fulton said Eforce intended to add another service every month.

"The US model is to say we have one product which can reach 230 million people. We say if we only have three million people here, we have to have more than one product."

Mr Paynter said Paynter Timber, which listed in 1986, had little future because of the conservation movement and Government policies.