B2B Paint & Coatings Industry

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

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)

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)

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

Chemical Suppliers -Solvents -Resins -Dryers -etc.

Value Chain

Coating Manufacturers Industrial Coatings Architectural Coatings OEM Retailers End User

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

Who are the Customers?

1.

2.

3.

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

Who are the Customers? (Cont’d)

Original Equipment Manufacturers

Wood, metal, and plastic finishers Automotive companies Aviation companies

After-Market Manufacturers

Eastman E-commerce Site Demo

Mission

: “To be the world’s 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

Chemconnect Home Page • Offers personalized member accounts

Industry Service’s 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.

How Do They Attract Business Online?

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

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.

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

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