Forest Products Companies Form B-to-B Alliance

ATLANTA—The U.S. paper and forest products industry buys and sells more than $400 billion worth of products annually. Some estimates are that at least a third of these transactions will be conducted online within the next few years.

With that in mind, Georgia- Pacific Corp., International Paper and Weyerhaeuser Co. have committed funding of $51 million to establish a global business-to-business electronic marketplace for forest products. The entity will be known as ForestExpress. Four other forest products companies—Boise Cascade, Louisiana-Pacific, Mead and Willamette—are reportedly considering taking part, as well.

Officials say the goal is to create a common platform to simplify and accelerate the adoption of electronic commerce across the industry, offering streamlined transaction processes, improved information flow and increased speed of delivery. ForestExpress customers and suppliers will also have access to many more potential transaction partners through the e-marketplace, officials add.

"ForestExpress provides an exciting opportunity for buyers and sellers to leverage technology and benefit from improved efficiencies and richer information about transaction options," explains interim CEO Keith Russell.

"The leading companies in the industry are demonstrating commitment to their customers by providing the impetus and initial funding to build an open and neutral marketplace that will reduce transaction costs, lower total supply chain costs and eliminate market inefficiencies," he adds.

ForestExpress.com will debut in the fourth quarter of 2000. Its initial areas of focus will be building materials, printing and writing papers, recovered fiber and timber, with additional areas of e-commerce to be added later.

ForestExpress will eventually function as an independent company with its own management, but is currently under the guidance of a board drawn from the ranks of its founding partners.