FreeMarkets signed an agreement with Solutia, which makes products including films for laminated safety glass, resins and additives for coatings, specialties such as aviation hydraulic fluid, and environmentally friendly cleaning solvents for aviation.
Under the agreement, FreeMarkets will provide Solutia with access to its business-to-business auction site eMarketplace, which the company will use to buy chemicals used in its final products.
FreeMarkets builds marketplaces and online auctions of industrial parts, raw materials and commodities.
The deal comes days after FreeMarkets announced it has formed an alliance with the National Tooling and Machining Association (NTMA), a 2,700-member trade association representing tooling and machining companies throughout the United States.
FreeMarkets has executed online transactions for more than $5.4 billion purchase orders to date and has created potential estimated savings of more than $1 billion for its customers, the company said. The company creates online auctions for products in more than 100 supply markets, including injection molded plastic parts, commercial machines, metal fabrications, chemicals, printed circuit boards, corrugated packaging and coal.
In March, FreeMarkets said it is acquiring privately held surplus product distributors Surplus Record and SR Auction for $18 million in cash. The acquisition boosts FreeMarkets' customer base at a time when large industrial companies are increasingly turning to the Internet to sell surplus equipment and inventory, the company said.
Online auctions are just one of many ways companies conduct online business-to-business transactions. Hordes of companies in various industries are jumping on the business-to-business bandwagon to buy and sell products online. Leading research firms have projected the market to reach between $2.7 trillion and $7.3 trillion by 2004, from about $131 billion last year.