Joint Internet Based Trading Initiatives
United Utilities PLC
5 April 2000
FORMATION OF A UTILITY BUSINESS TO BUSINESS TRADE EXCHANGE
Three of the UK's leading utilities today announced two internet based trading
initiatives encompassing a procurement consortium and a major European
internet portal.
Utility Internet Portal
United Utilities, Scottish Power and Northern Electric are working with a
group of European electricity and water utilities to facilitate the formation
and utilisation of an electronic portal to secure the benefits of internet
based procurement and are in active discussions to further shape the portal
and determine initial membership.
The portal will operate as an independent entity and create an electronic
marketplace to simplify transaction processes, improve information flows and
increase the speed of delivery, thereby reducing costs. The portal will also
provide a range of services to enhance asset management for members and
participating organisations. The portal will be open to participation by any
company in the utility sector.
The kinds of goods and services which could be traded include the full range
of products used within utilities businesses. This could include anything
from transformers and switchgear to plastic pipes and water valves, in
addition to infrastructure services.
The intention is to develop a major e-business company, which could eventually
be floated.
Any supplier large or small can participate and the approach will benefit all
suppliers by giving them greater market reach and reducing transaction costs.
Procurement Consortium
The consortium has been created by the three companies and is designed to
maximise the benefits of common procurement and supply chain management.
The consortium will:
- harmonise procurement standards
- cut procurement costs by exploiting benefits of scale
- cut costs by exploring opportunities to share warehousing and strategic
spares
- use e-commerce to enhance efficiency
- explore opportunities for on-line auctions
The consortium intends to begin internet based trading by Summer 2000.
Additional Information
The Chief Executives of the three companies welcomed the initiatives as a
creative move for the utility industry and a defining step in positioning the
industry to benefit from business to business e-commerce. The initiatives
will radically re-shape the utility procurement marketplace to help the
industry meet the current and future needs of customers and promote better
relationships with trade partners and suppliers.
Appropriate regulatory approval will be sought for the initiatives.
Morgan Stanley Dean Witter, PricewaterhouseCoopers and IBM are working with
the consortium.
For further information, please contact John Roberts, United Utilities' Chief
Executive on 01925 285000.
United Utilities' ordinary shares trade on the London Stock Exchange and its
ADRs, each equal to two ordinary shares, trade on the New York Stock Exchange
under the trading symbol UU.
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