Orica aims for online cleanup

Chemical distribution giant Orica Chemnet has pushed the limits of IBM's WebSphere internet tool kit to create a $A1.2 million ($1.5 million) online storefront for business clients.

Andrew Crawshaw, Orica Chemnet's commercial manager ebusiness, said building the site in partnership with IBM Global Services Australia proved to be bleeding-edge stuff.

"WebSphere started as a B2C [business-to-consumer] tool. We've converted it to a B2B [business-to-business] tool, and since then IBM GSA has decided to run with it as their standard B2B sell side platform," Mr Crawshaw said.

He said that when Orica started planning for the site 18 months ago, there did not seem to be many tools in the market for building B2B sites.

"We had a good look around, but thought with a small amount of customisation - which turned out to be a huge amount - WebSphere would be the one for us."

The site at www.orica-chemicals.com had a soft launch in Australia in September, and was fully opened up to New Zealand customers last week.

Mr Crawshaw said the feedback from the market had been encouraging. "We've also had large industrial companies like ourselves wanting to buy the site from us."

This could involve Orica replicating the site, or setting itself up as an ASP (application service provider) and hosting sites for other firms.

Orica Chemnet manager Guy Roberts said the company was still considering whether to go down that track. He said the site itself was a departure for the company.

"Normally we have strict return on investment guidelines, and any expenditure has to go through many vetting channels and have close to a guaranteed return," Mr Roberts said.

"With this, it's a 'build and they will come' strategy. It was a leap of faith for the board."

One reason for the site was to discourage anyone else creating a chemicals portal.

"The threat to us is other people will get the space in front of the customer and create intimacy and win the loyalty of the customer at our expense. That threat could come from anywhere - Europe, the United States.

"It's a defensive strategy, but it's also aggressive in that we think some existing customers, and customers we don't have, will prefer to deal with us this way."

The company is conservatively forecasting the site will account for about 10 per cent of its business within 12 months, and that it will halve transaction costs.

The site contains more than 4000 products, which are drawn from catalogues held in Orica's SAP system and mirrored in a DB/2 database which is refreshed hourly.

When a customer picks a product, the WebSphere tools go back into the SAP database to check stock levels, pricing and other details which live in an ERP (enterprise resource planning) system.

Mr Crawshaw said the SAP system also held information such as safety data sheets, customer account status and whether customers could legally buy certain chemicals.

Mr Roberts said Orica NZ had a turnover of about $600 million, of which $250 million came from the Chemnet chemicals business - much from supplying cleaning chemicals to the dairy industry.