Talks to build online market

By ADAM GIFFORD

Some of the biggest names in building supplies and construction are holding talks to set up an online marketplace for the industry.

At present, ConstructionNet is just a page on the internet. But it aims to become "the world-beating online environment that will streamline the construction industry in New Zealand."

The domain name owner, independent project manager Matthew Blomfield, said companies would be asked to commit to the site this month.

Those considering the proposal included Carter Holt Harvey, plumbing and electrical parts supplier Mico Wakefield and New Zealand Office Supplies.

Mr Blomfield, who has experience in the building industry in Northland, came up with the idea about eight months ago and started knocking on the doors of some big businesses.

His thoughts on what made a successful online marketplace struck a chord with managers who had been watching dotcom disasters unfold.

"A marketplace won't work if one big company creates it and asks other companies to come on board," said Mr Blomfield. "It must be a joint effort. I believe no one should own more than 5 per cent of it."

A marketplace also needed to mix buyers and suppliers, he said. Buyer-heavy marketplaces could be seen as a way to gang up on suppliers, and seller-driven marketplaces could struggle to win buyer confidence.

"There's a cultural change involved. Business is heading to collaborative models and partnerships."

The savings offered by the marketplace would be in timely supply, being able to match demand with supply, and a big reduction in paperwork.

Costs for the feasibility exercise are shared equally among participants. Mr Blomfield is putting some of his own money into it.

"We've identified nine options, ranging from $1.7 million to $46 million."

Carter Holt Harvey e-business manager Darren Walbank said there was still no agreement.

"I have been monitoring what is in the marketplace," he said. "Anyone who talks, we monitor to see if there is something in it. I think there is still some evolution to go."

He said Carter Holt did not intend to create its own marketplace.

"If you look at marketplaces around the world, they only work if they are neutral."

Mico Wakefield customer solutions manager Gerard Fletcher confirmed that his company was involved in the discussions.

Meanwhile, Carter Holt is using internet-based marketplace Cyberlynx. In January, the company paid $1.8 million to become part of the Australian office supplies, IT, travel and hotel consortium, using Ariba software.

Shareholding members of the e-hub include Telecom, Lion Nathan, Woolworths, EDS Australia and the Commonwealth Bank. Carter Holt joined the Australian-based market because it spends as much as 35 per cent of its procurement budget there.

Construction Net