hen Eastman Chemical Co. decides to adopt a new technology for its E-business systems, it sometimes buys more than the product--it buys a stake in the provider company, too. Since last May, the chemical, fibers, and plastics manufacturer has invested in six Web ventures it says are redefining the way companies do business.
"An equity investment aligns you even closer with the provider," says Mark Klopp, director of digital business ventures at Eastman, in Kingsport, Tenn. "We both have an interest beyond the regular partnership to help that technology become successful. We want to leverage that relationship any way we can to add value to our shareholders and not just limit ourselves to selling products to collect revenue."
In addition to ShipChem.com, an online logistics service Eastman co-founded last month, Eastman has stakes in:
ChemConnect Inc., an online market exchange for the chemical industry. Most major chemical companies have stakes in ChemConnect. "We see industry partnership in a neutral model being so compelling that it will emerge as a winner," Klopp says. "Once you get industry support, the service can scale and be successful. In essence, you're partnering with the industry, not alienating the industry. Those who try to disintermediate the industry will lose, in our estimation."
Internet Capital Group Inc., a holding company that has a stake in more than two dozen E-businesses. What does Eastman like about Internet Capital? Its strategy of amassing E-businesses that will dominate their industry segments. "They're trying to be the General Electric of the E-commerce world, owning the No. 1 or No. 2 companies in each industry segment," he says. Klopp says he believes the relationship could produce new E-business alliances among chemical companies.
WebMethods Inc., a business-to-business provider of E-commerce system integration products. "We believe so much in the technology that we want to support the company, and help them to deploy and proliferate their system within the chemical industry," Klopp says. Through WebMethods, "we can establish a standard integration and communications pipeline for our industry."
eCredit.com Inc., a provider of real-time credit, financing, and related services for E-businesses. "Two components of successful online transactions will be financial credit and settlement and logistics," Klopp says. "We're covering logistics with ShipChem.com. We're making the play in the financial and credit-management area through eCredit. They're by far the leaders in their space."
Commerx Inc., the creator of PlasticsNet.Com, the online marketplace for the plastics industry. Selling plastics is a high-cost effort. Says Klopp: "PlasticsNet will be the channel that we'll use to reach the small and midsize businesses that we weren't able to reach otherwise."
hen Eastman Chemical Co. decides to adopt a new technology for its E-business systems, it sometimes buys more than the product--it buys a stake in the provider company, too. Since last May, the chemical, fibers, and plastics manufacturer has invested in six Web ventures it says are redefining the way companies do business.
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