B2B Paint

1
B2B Paint Coatings Industry

• Abhiroop Gandhi, Max Hernandez-Toso, Yanqiu Hou,
  Andrew Jones, Lauren King

2
Overview of the Industry

• It would be hard to find a manufacturer in the
  United States that doesn't rely on the
  contribution of paints and coatings to add value
  to its own products.
• Sales of paints and coatings manufacturers in
  1997 were 16.4 billion, an increase of 3.3
  percent from the 1995 level of 15.9 billion.
• Source National Paint Coatings Association
  (NPCA)

3
Classification of Products

• Architectural coatings -- the products everyone
  knows as "paints" -- account for 37.2 percent of
  the industry's annual sales, or approximately
  6.1
• billion annually.
• Industrial coatings make up another 35.4 percent,
  5.8 billion. 17.6 percent, or nearly 2.9
  billion, fall into a "special purpose" category.
• The remaining 9.8 percent, or 1.6 billion,
  represent miscellaneous paint products.
• Source National Paint Coatings Association
  (NPCA)

4
Industry Issues

• Heavy regulation by the EPA and other agencies
• EPA proposes to append National emissions
  standards for hazardous air pollutants
• 4 Compliance Assistance Centers for the paints
  and coatings industry established (NPCA news)
• Anti-graffiti project
• Old-lead paint (currently a law-suit pending)
• Managing left-over paint and pollutants

5
Value Chain
Coating Manufacturers Industrial Coatings Archi
tectural Coatings
OEM
Chemical Suppliers
-Solvents -Resins -Dryers -etc.
Retailers
End User
6
Major Players by Categories
Industry Service Chemexchange http//www.chemexchange.com Chemconnect http//www.chemconnect.com
Manufacturer Akzo Nobel http//www.akzonobel.com Sherwin-Williams http//www.sherwin.com Du Pont http//www.dupont.com PPG http//www.ppg.com Eastman Chemicals http//www.eastman.com ICI http//www.ici.com
Distributor fobchemicals https//www.fobchemicals.com
Source Paint Coatings Industry Magazine
7
Who are the Customers?

• Industry Service
• ChemConnect brings together three user
  communities
• Suppliers of chemicals and plastics
• Buyers who use chemicals, plastics in
  manufacturing operations
• Intermediaries
• Buyers and sellers from around the world,
  meet online, in real time, to conduct business.
• Source ChemConnect Inc.
  http//www.chemconnect.com

8
Who are the Customers? (Contd)

• Original Equipment Manufacturers
• Wood, metal, and plastic finishers
• Automotive companies
• Aviation companies
• After-Market Manufacturers

9
Eastman E-commerce Site Demo
Mission To be the worlds preferred chemical
company, we are dedicated to creating superior
value for customers demanding plastics,
chemicals, and fibers, focusing on exceeding
customer expectations while achieving our major
improvement opportunities.
The first chemical company in the world to offer
online e-commerce capabilities
10
Chemconnect Home Page

• Offers personalized member accounts

11
Industry Services Operations

• Register for first users/Log on personal accounts
  for registered users.
• Search database by application, property, name or
  trademark, etc.
• 24/7 place and revise orders
• Find the status of orders. Review order status,
  summary of purchases.
• Track goods shipments.
• Find supports from online customer help.

12
How Do They Attract Business Online?

• Word of mouth
• Media advertising
• Direct mail
• Corporate affiliation
• Product catalog
• Search engines
• Links from associations, societies, etc.

13
Primary Value Additions

• Customers will be able to access a broader, more
  competitive supply base with lower product
  prices, as well as benefit from increased
  efficiency in the procurement process.
• Manufacturers will benefit from reduced marketing
  and selling costs, wider customer reach with
  greater visibility, improved inventory management
  and access to valuable information about buying
  trends.
• Distributors will have exposure to a broader,
  more competitive supply base, lower sales and
  marketing costs through increased efficiency, and
  access to new customers.

14
Why is Eastman Moving Their Business Online?

• B2B E-commerce offers Eastman the opportunity to
  shape a new Internet marketplace, work with a
  strongly branded B2B technology company with
  vertical market expertise, and broaden its
  growing e-commerce platform.
• "By creating an open and neutral Internet
  marketplace, online market will improve
  efficiency in the supply chain for Eastman and
  our suppliers, as well as for all buyers and
  suppliers of these products.
• Source Eastman Chemical News Release 02/10/2000

15
How to Lock-in Customers

• Host procurement solutions on site, and offer
  consultant services (Ex logistics planning)
• Customer services online tutorials, consulting
  programs, etc.
• Become more of a market aggregator to attract a
  larger audience
• Personalized accounts
• Free domain search for both guests and members
• Newsgroups, updated news, articles