b 2 b at enron tom ,
i am sending you the information about our new b 2 b unit .
i have talked yesterday with greg whalley who is heading the new
unit about the e - commerce project at wharton and recommended that enron join
this program .
i have sent him this morning a copy of the materials you gave me .
the meeting with jeff skilling has been pushed till the 2 nd half of july .
i talked to him briefly twice that jeff shankman and i want to discuss with
him building a relationship with wharton . jeff shankman is , by the way , a
great friend of
your institution .
vince
* * * * * * * * * * * * * * * * * * * * * * *
companies & finance : the americas : enron sees bricks and
bytes mix reshaping energy market : purchase of mg only
a start in
building b 2 b platforms , writes hillary durgin :
companies financial times ; 16 - jun - 2000 12 : 00 : 00 am ;
604 words
by hillary durgin
if jeffrey skilling is right ,
enron ' s acquisition of mg is only the tip of the iceberg .
enron ' s president and
chief operating officer is engineering a fundamental
strategy shift at the
houston energy company , aimed at making it a dominant
" new economy "
player across various industrial markets .
the dollars 446 m acquisition last month of mg , the
uk - based metals trader ,
is only the first of more than dollars lbn in estimated
new investments the
company is targeting . it is seeking vehicles on which to
build
business - to - business ( b 2 b ) platforms in sectors such as
logistics , chemicals ,
agricultural products and pulp & paper .
mr skilling wants to take the business model the company
developed in
natural gas and power and apply it to other wholesale
commodity markets . he
argues the electronic platforms it creates will not only
become the principal
b 2 b sites for those sectors , but reshape those
industries .
as an example , he points to enron ' s new e - commerce
platform , enrononline ,
which has changed the way the company does business with
its customers
while significantly increasing sales .
the company - the largest wholesale merchant of natural
gas and power - saw
wholesale , physical deliveries of natural gas surge 53
per cent in the first
quarter .
critics argue that enron ' s move away from its familiar
energy business into
new industries , where the learning curve is steep and the
competition
entrenched , is risky . yet a number of industry analysts
point out enron has
proved it understands markets and how to manage risks
while becoming the
largest importer of coal in the uk , the largest trader of
gas and power in the
us and grabbing an advantage in bandwidth .
" it ' s a prudent strategy , but it ' s got to be done in an
orderly way , " says ronald
barone , analyst with paine - webber in new york . " what
they ' re doing here is
what they ' ve been incredibly successful at doing , " he
adds , noting that enron
posted dollars 1 . 3 bn in earnings before interest and
taxes ( ebit ) from its
wholesale energy and services business in 1999 , up 34 per
cent from the
previous year .
earnings from that division accounted for two - thirds of
the company ' s overall
income before interest and taxes last year , and mr barone
sees the unit ' s ebit
increasing 15 - 30 per cent annually over several years .
as with gas and power and now broadband , where enron is
standardising
contracts and creating a market in bandwidth , it wants to
create markets by
entering as a physical player and providing merchant ,
risk management and
financial services over the internet .
" we will provide electronic commerce , but we will provide
liquidity and we will
provide settlement , or fulfilment of that contract , " mr
skilling says . " that is an
extremely powerful model . if you look at other b 2 b sites ,
they don ' t do that . "
mr skilling argues enron ' s e - commerce platform will
triumph over the other ,
bulletin board - type exchanges , where striking a deal
depends on two parties
hooking up and working through uncertainties over timing ,
price , credit and
fulfilment .
not everyone shares that view . some energy companies , for
example , would
rather not do business with a competitor . bp amoco
recently purchased a 3
per cent stake in altra energy technologies , a houston -
based , neutral
wholesale energy exchange . with koch industries and
american electric
power , it also committed to carry out a fixed volume of
transactions on the
site to lend it liquidity .
just as in gas and power and now broadband and metals ,
enron believes it
needs networks of strategic physical assets . in acquiring
mg , enron got a
stable of warehouses , lending it a strong physical
position .
" it should provide ( mg ) with a more vibrant , more active
physical spot market
in more markets in the world , " says greg whalley , chief
executive officer of
enron net works , the new division enron is launching to
identify and enter
commodity markets . he argues that in metals and other
markets , enron will
deliver better pricing , price risk management services ,
cross - commodity
transactions and flexible transactions for a wider range
of customers .
mr skilling says there are significant rewards for
restructuring an industry .
" if you can take that platform , and you use the
capabilities the bricks bring to
the table , e - commerce the industry and change the
structure , you ' re selling for
more than a 50 multiple . "
copyright , the financial times limited
b 2 b at enron
tom ,
i am sending you the information about our new b 2 b unit .
i have talked yesterday with greg whalley who is heading the new
unit about the e - commerce project at wharton and recommended that enron join
this program .
i have sent him this morning a copy of the materials you gave me .
the meeting with jeff skilling has been pushed till the 2 nd half of july .
i talked to him briefly twice that jeff shankman and i want to discuss with
him building a relationship with wharton . jeff shankman is , by the way , a
great friend of
your institution .
vince
* * * * * * * * * * * * * * * * * * * * * * *
companies & finance : the americas : enron sees bricks and
bytes mix reshaping energy market : purchase of mg only
a start in
building b 2 b platforms , writes hillary durgin :
companies financial times ; 16 - jun - 2000 12 : 00 : 00 am ;
604 words
by hillary durgin
if jeffrey skilling is right ,
enron ' s acquisition of mg is only the tip of the iceberg .
enron ' s president and
chief operating officer is engineering a fundamental
strategy shift at the
houston energy company , aimed at making it a dominant
" new economy "
player across various industrial markets .
the dollars 446 m acquisition last month of mg , the
uk - based metals trader ,
is only the first of more than dollars lbn in estimated
new investments the
company is targeting . it is seeking vehicles on which to
build
business - to - business ( b 2 b ) platforms in sectors such as
logistics , chemicals ,
agricultural products and pulp & paper .
mr skilling wants to take the business model the company
developed in
natural gas and power and apply it to other wholesale
commodity markets . he
argues the electronic platforms it creates will not only
become the principal
b 2 b sites for those sectors , but reshape those
industries .
as an example , he points to enron ' s new e - commerce
platform , enrononline ,
which has changed the way the company does business with
its customers
while significantly increasing sales .
the company - the largest wholesale merchant of natural
gas and power - saw
wholesale , physical deliveries of natural gas surge 53
per cent in the first
quarter .
critics argue that enron ' s move away from its familiar
energy business into
new industries , where the learning curve is steep and the
competition
entrenched , is risky . yet a number of industry analysts
point out enron has
proved it understands markets and how to manage risks
while becoming the
largest importer of coal in the uk , the largest trader of
gas and power in the
us and grabbing an advantage in bandwidth .
" it ' s a prudent strategy , but it ' s got to be done in an
orderly way , " says ronald
barone , analyst with paine - webber in new york . " what
they ' re doing here is
what they ' ve been incredibly successful at doing , " he
adds , noting that enron
posted dollars 1 . 3 bn in earnings before interest and
taxes ( ebit ) from its
wholesale energy and services business in 1999 , up 34 per
cent from the
previous year .
earnings from that division accounted for two - thirds of
the company ' s overall
income before interest and taxes last year , and mr barone
sees the unit ' s ebit
increasing 15 - 30 per cent annually over several years .
as with gas and power and now broadband , where enron is
standardising
contracts and creating a market in bandwidth , it wants to
create markets by
entering as a physical player and providing merchant ,
risk management and
financial services over the internet .
" we will provide electronic commerce , but we will provide
liquidity and we will
provide settlement , or fulfilment of that contract , " mr
skilling says . " that is an
extremely powerful model . if you look at other b 2 b sites ,
they don ' t do that . "
mr skilling argues enron ' s e - commerce platform will
triumph over the other ,
bulletin board - type exchanges , where striking a deal
depends on two parties
hooking up and working through uncertainties over timing ,
price , credit and
fulfilment .
not everyone shares that view . some energy companies , for
example , would
rather not do business with a competitor . bp amoco
recently purchased a 3
per cent stake in altra energy technologies , a houston -
based , neutral
wholesale energy exchange . with koch industries and
american electric
power , it also committed to carry out a fixed volume of
transactions on the
site to lend it liquidity .
just as in gas and power and now broadband and metals ,
enron believes it
needs networks of strategic physical assets . in acquiring
mg , enron got a
stable of warehouses , lending it a strong physical
position .
" it should provide ( mg ) with a more vibrant , more active
physical spot market
in more markets in the world , " says greg whalley , chief
executive officer of
enron net works , the new division enron is launching to
identify and enter
commodity markets . he argues that in metals and other
markets , enron will
deliver better pricing , price risk management services ,
cross - commodity
transactions and flexible transactions for a wider range
of customers .
mr skilling says there are significant rewards for
restructuring an industry .
" if you can take that platform , and you use the
capabilities the bricks bring to
the table , e - commerce the industry and change the
structure , you ' re selling for
more than a 50 multiple . "
copyright , the financial times limited