Virtual trade link-up
r
e-commerce
What's NewS Issue 1 January/February 2000 3
Our New York office recently took the wraps off an Internet initiative of
far-reaching importance - one that will instantly catapult our organization
into a leading position in the F&A business-to-business electronic marketplace.
In early February, plans were announced to form a new company,
vTraction.com, which acts as an umbrella for a series of partners who, working
together, have assembled all of the components of a functioning, Internet
based virtual marketplace.
Capturing growth
Top players
Cooperative spirit
Customersatisfaction
During our last century
as a cooperative organi
zation, a prevailing model
has seen nearly all wholesale
agrieultural commodity
exchanges - ranging front
wheat to livestock to fresh
produce - grouped around
local physical trading places
where all of the main players
gathered together to transact
their affairs. This old model
is visibly passing away.
Increasingly, at the start of a genuinely
global and silicon driven 21 st century,
these business-to-business markets are
rapidly migrating into a placeless, Internet
based electrosphere. It has been estimated
that as ntuch as one-fifth of the USD 10
to 12 trillion traded annually in all of
the world's F&A markets will he traded
via the Internet within three years.
Most of our clients have been struggling
for some months to come to grips with
the broad implications and opportunities
associated with the Internet. As develop-
ments accelerate beyond anything thought
possible even a few years ago, it is evident
that the current rise of new electronic
trading places, where players interact with
each other virtually rather than physically,
is reconfiguring the dynamics of doing
business as well. While many of our F&A
clients have invested significant sums in
creating their own proprietary and
feature-rich websites, complete with
e-commerce 'functionality', they have yet
to recognize that a functioning global
market will necessarily be based on
cooperation rather than competition.
From a strategie perspective, therefore,
the importance of vTraction for
Online players: Robert Wolthuis (above)
and Ejnar Knudsen of the New York team,
taking Rl to the next level in e-commerce with
vTraction.com
Rabobank lies in the fact that we have
successfully established a strong position
in a market on the cusp of explosive
growth. From a branding perspective, we
have become the first international bank
to solidly link our name and expertise to
a viable electronic trading environment
for F&A commodities that is bringing
together the leading players involved in
business-to-business exchange.
'The vTraction concept involves a pooling
of talents - and attracting a critical mass
of participants to a single e-commerce
environment,' says New York's
James Coulter, a leading player in the
vTraction project. 'If we act together
like "cousins" in an extended family, all
participants will be enriched by
the sharing of resources and expertise.'
vTraction has been incorporated as a
separate legal entity from Rabobank and
has been structured with a view towards
an eventual public offering (IPO). In the
weeks and months leading up to the for-
mation of vTraction, several Rabobankers
including Ejnar Knudsen, who will
become the new CEO, together with
Robert Wolthuis and James Coulter, criss-
crossed the US to establish strategie ties
with, and minority investments in, a host
of cutting edge e-commerce companies.
These companies include: AgriBiz.net,
Foodtrader.com, TradingProduce.com,
FBIX.com, Farms.com and e-Harvest.com
'One crucial success factor for such a
marketplace is that it is perceived by all of
the players as being truly independent and
not under the effective control of one big
player or another,' says Ejnar Knudsen.
'Other crucial factors are that the market
demonstrate price
transparency and deliver
an effective means of
price discovery. In the
new Internet economy,
success is bred by a
cooperative spirit.' For
these and other
reasons, although we
will initially maintain a
controlling stake in the
vTraction cooperative,
all of our key strategie
partners are being
invited to participate as
shareholders in the
pre-IPO phase, and our own interest
will be reduced to a minority position as
the marketplace gathers pace. 'This coop
erative spirit of sharing expertise and
resources will enable vTraction's partners
to emerge as leaders in their respective
markets,' remarks executive board
member Jan Groninger.
In addition to the expertise and hrand
recognition associated with Rabobank
itself, vTraction will tap the talents and
specific strategie capabilities of everything
from market makers to e-consultants to
providers of required services. These
services, in turn, range from user
verification technologies to electronic
escrow services to insurance and inspec-
tion of goods. While the trading sites will
he structured in such a way that
Rabobank related services are promi-
nently available - for example insurance -
a full spectrum of competing services from
other providers will be offered as well.
'The ultimate aim is to bring together ex
pertise in order to provide a trading solu-
tion that will bring value to the customer
at the end of the day," Knudsen says.
Check out the new www.vTraction.com
website for updates.
