Chemical industry 'super-hub' may be on horizon.

The acquisition of Houston-based chemicals industry consortium e-marketplace CheMatch, by its rival San Francisco-based ChemConnect in January 2002, has caused analysts to speculate over the future creation of chemical industry 'super-hub'.

The merger will create a combined e-marketplace that is expected to host more than $4 billion ([Euro]4.54 bn) worth of transactions annually. However, Forrester Research believes that the merger represents the first step to create an even bigger industry exchange that may combine two other e-marketplaces: plastics e-marketplace, Omnexus, and Frankfurt-headquartered chemical e-marketplace, Elemica.

Although it may seem unusual that these competing e-marketplaces would willingly combine forces, the fact that almost all of them have at least two similar major investors makes it all the more likely. Especially as chemical industry e-marketplace owners are embracing consolidation.

For example, Omnexus and Elemica combined forces in a 'deep strategic alliance' at the end of 2001 to reduce any duplication that might occur when developing their exchange and integration platforms. The alliance will significantly reduce the development and integration cost for companies such as DuPont, BASF, Bayer, Dow Chemicals, DSM and Atofina, all of which are major shareholders in both Elemica and Omnexus. A similar strategy would have played a part in ChemConnect's acquisition of CheMatch. Both e-marketplaces shared investors Bayer and DuPont.

This type of consolidation may act as a model for the future of the Consumer Packaged Goods (CPG) industry in which there are at least four consortium backed e-marketplaces: Transora, The World Wide Retail Exchange, GlobalNetExchange, and CPGMarket.com - all of which share some investors.