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,, 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 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:,,,, and '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 website for updates.

Rabobank Bronnenarchief

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