Headline: Asian steel companies to do business over the Internet
Byline: Agence France-Presse (Copyright 1999)
Publication date (DD/MM/YYYY): 08/12/1999

SINGAPORE, Dec 8 (AFP) - Asia's steel companies, one of the region's most traditional industries, are hoping to revolutionalise and start doing business over the Internet. iSteelAsia.com, founded by a consortium of over 20 companies in the steel industry around the region, aims to make five billion US dollars from online trading over the next three years.

"When we talk about steel, we are talking about a commodity with specifications," Andrew Yao, one of the founding members of the first steel exchange portal told AFP. "It is an industry that is ripe to utilise the latest information technology. To match the buyer and seller together," said Yao, who is also chairman of Van Shung Chong Holdings Ltds, a Hong Kong steel distribution company.

Yao said the business will focus on Asia, which accounts for about 45 percent of global steel consumption worth an annual turnover of some 300 billion US dollars.

"Our focus will be in Asia. We believe that the total worldwide steel trading industry is approximately 700 billion US dollars. Out of that, 45 percent of that is located in Asia," he said.

Yao said the amount of intra-Asian steel trading had risen about 20 to 30 percent following the economic crisis that hit the region in 1997.

"So Asians are buying more and more among Asians," he said, adding that the portal was "really good news for Asian companies" because it would help them "save money, by either reducing inventory or speeding up production schedule."

Citing a report by Goldman Sachs, Yao said companies adopting electronic commerce may enjoy total cost savings between three to 12.5 percent Yao said buyers and sellers in Asia's steel industry were still very reliant on traditional facsimile and phone communication.

But with iSteelAsia.com work that would usually take about two weeks can be done in "virtually a few hours," he said.

iSteelAsia.com, which will be available in English, Japanese and Chinese, has registered about 300 personal users since it was founded last month and the figure is forecast to increase to about 1,000 by next year.

"We have a very strong Chinese steel trading tradition. Most steel traders there are Chinese based. I think we are the only website of this kind that offers multi-lingual," Yao said. lys/cf