Johnnic, Ariel in B2B joint venture

Johannesburg, 15 Aug 2000

TradeWorld, the fledgling Johnnic business-to-business (B2B) portal, has announced a joint venture with Denel subsidiary Ariel Technologies to create what they expect to be the largest electronic procurement hub in SA.

The 50-50 venture has not yet been named, but will be run by TradeWorld.

TradeWorld MD Sean Emery says the deal combines the Ariel buyer customers with TradeWorld`s base of suppliers, giving added impetus to each. TradeWorld says it is processing 41 000 orders per month with a value of R500 million, and Ariel expects to handle procurement worth R500 million within six months, with that figure expected to reach R5 billion within two years. These orders are to be channelled through the joint venture.

"We have the critical mass already," says Johnnic e-Ventures CEO Neil Jacobsohn, commenting on competition in the B2B market. "That makes it possible to leapfrog the competition."

The venture will see no money change hands, but is described as a technology exchange. It will manage the backend platform on which TradeWorld and the Ariel procurement service, to be branded as Hub-21, will function. Johnnic-owned I-Net Bridge will provide the backbone technology.

TradeWorld`s shareholding is split between I-Net Bridge with 50%, Rainbow Software International with 30% and Johnnic e-Ventures with 20%. I-Net Bridge is more than 60% owned by Johnnic.

TradeWorld will provide Ariel with the products and tools developed over the past 12 months and Ariel will make its Integration Master software available to TradeWorld. The software makes third-party integration possible, a function that is expected to be put to heavy use.

"We expect to take on a lot of partners to facilitate the e-commerce," says Malcolm Dunkeld, Ariel e-commerce solutions MD, promising several announcements in coming weeks. He says the open catalogue system in use will make it easy to connect to other hubs to establish a global trading system.

"Electronic trading hubs will not be able to operate in isolation," says Emery. "We will see more and more collaboration between trading hubs in the future."

Zeth Malele, Ariel Technologies MD, says Ariel`s relationship with government will be exploited on the demand side, making large state procurement contracts accessible to small businesses. "Major organisations" are close to signing on to Hub-21, he says.

Further joint technology ventures between Denel and Johnnic are said to be a real possibility.