LONDON (CNI)--German chemicals and life sciences group BASF announced Tuesday it has taken an equity stake in ChemConnect and chosen the e-commerce company's chemical exchange as its preferred partner to purchase raw materials.
The stake in ChemConnect also gives BASF a role in the e-commerce site's technology roundtable to push development of internet trading. BASF declined to disclose any financial or percentage details of the equity investment, or the target savings sought for its Euro5bn ($4.9bn) annual raw materials costs by using the chemicals exchange.
In a statement, BASF deputy chairman Max Dietrich Kley, said: "Our strategic partnership will enable us to play an active role in establishing this promising market as well as in developing the necessary technology."
A spokesman for the company said that BASF is not currently looking to make further equity investments in e-commerce chemicals trading businesses, but added that it will review how e-trading develops.
He said that the stake in ChemConnect enables BASF to have involvement in the technological development of e-commerce in the chemicals sector. "It shows we're looking to find the best purchasing solutions," said the spokesman.
BASF's stake in privately-owned ChemConnect follows equity stakes taken in the US-based business by BP Amoco Chemicals, Dow Chemical, Eastman Chemical, Rohm and Haas (R&H), Andersen Consulting, Chemical Market Associates Inc (CMAI) and Chemical Week Ventures.
Royal Dutch/Shell has taken a different path into e-commerce with a joint venture with US-based firm Commerce One. The venture aims to develop a market place for oil and gas sectors as well as chemicals.