Thu, Feb 03, 2000 - Page 17 News List

China Steel, Far Eastern partner in Web venture

By Sharon Chuang  /  STAFF REPORTER

China Steel Corp (中鋼) and Far Eastern Group (遠東集團) announced an alliance yesterday to jointly develop a project aimed at capturing a slice of Taiwan's business-to-business e-commerce market.

Under the alliance, Far Eastern will take a 35 percent stake in an e-commerce venture China Steel has already set up.

China Steel earlier this year invested NT$130 million to create an e-commerce company called Wang Ju You Shi (網際優勢). Far Eastern will inject an additional NT$45 million into the project. The Web company plans to increase its total capitalization to NT$500 million in the future.

"We are talking with many other local firms that have shown interest in investing in the new company," a China Steel official said yesterday.

The new enterprise will provide a way for manufacturing companies to do business over the Internet. According to C.Y. Wang (王鍾渝), chairman of China Steel, Far Eastern Group's major businesses include textiles, cement, banking, retail and telecommunications. China Steel and Far Eastern Group's businesses together will account for a considerable portion of transactions conducted through the new e-commerce venture.

"The total annual purchases and sales of the two corporations amount to NT$500 billion. This alliance ensures a large customer base for Wang Ju You Shi," Wang said.

"China Steel and Far Eastern are among the few local companies that employ the ERP [Enterprise Resource Planning] system," said Douglas Hsu (徐旭東), chairman and CEO of Far Eastern Group. "So both companies already have the technology in place to do e-commerce."

China Steel's chairman noted that now is a good time to get into e-commerce because the number of Internet users is rapidly increasing and the technology is quite mature.

According to statistics provided by China Steel, the business-to-business market will reach US$403 billion this year and US$2 trillion by 2002.

According to Laing Chong-chun (梁仲春), executive manager of Wang Ju You Shi, there are already many Web ventures that target consumers, but the market to serve businesses in Taiwan is just beginning to emerge.

In addition, due to Taiwan's high population density, a focus on consumers is not needed, as customer convenience is less of a problem in Taiwan.

On the otherhand, greater business-to-business integration would be of great value.

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