BHP Limited of Australia recently announced a major contract between its steel business, BHP Steel, and e-Steel Corporation, a leading e-commerce technology provider and exchange for the global metals industry. BHP Steel is the largest steel producer in Australia and the 19th-largest worldwide. Under the agreement, e-Steel will build and power multi-level, private, transactional marketplace networks for BHP Steel and its entire value chain.
The three-year agreement marks a new stage of cooperation between independent B2B exchanges with traditional industry brick-and-mortar companies. The two companies joined forces to develop solutions designed to quickly advance wide-scale adoption of e-commerce collaboration for BHP Steels customers throughout the Australian, Asian and New Zealand region.
The underlying technology platform for these marketplace sites will be the proprietary e-Steel SteelDIRECT technology. This innovative solution provides B2B flexibility in online channel, customer and supplier relationship management, which is critical for end-to-end e-commerce.
The new marketplace will have the capability to accommodate transactions for BHP Steels portfolio of steel products, and will integrate a combination of BHP Steel and e-Steel applications, such as transportation, logistics, purchase orders, order tracking, order status, reorder and mill test certificates. Initially, the site will focus on BHP Steels customers in Australia, New Zealand and Southeast Asia. The site is planned to open in January 2001.
BHP Steel will also install the e-Steel Connect system for complete end-to-end integration of transactional data with back office, inventory management and shipping systems. Importantly, in using the e-Steel Connect integration system, BHP Steel will adopt SML (Steel Mark-up Language), the Internet-based, data integration language that e-Steel is helping to define and develop in conjunction with leading industry standards committees. Our research shows that private exchanges could represent 50 to 75 percent of the revenue opportunity in the next two years. With BHP as its newest partner, e-Steel is centered in the middle of a companys e-commerce eco-system its one of the first to provide a trading platform that helps companies link to both customers and suppliers, said AMR Research, Senior Vice President, Bruce Richardson.
Under the terms of the contract, e-Steel will receive subscription-based revenues, transaction fees and professional services consulting fees to build, operate and power the site. e-Steel will support this project with a team at BHP Steels major flat products production complex in Port Kembla, New South Wales.