The Internet portal for the food ingredients industry - Ingredientsnet.com - established last year by Glanbia and Fyffes, is the latest casualty of the dot.com downturn and has suspended operations with the loss of 20 jobs. Glanbia and Fyffes each invested $2.5 million (€2.9 million) in start-up capital in Ingredientsnet.com in March last year. A Glanbia spokesman said investment in the portal had been capped at $2.5 million and it was clear from the outset that additional funding for the project would have to come from outside investors.
He added that the $2.5 million has already been provided for by Glanbia and there would be no charge in the 2001 accounts against the cost of the project. "The business plan was that we and Fyffes would put up the stage one capital and after that money would have to come from external sources," said the Glanbia spokesman.
It has been estimated that Ingredientsnet.com needed a further $10 million but that there was little prospect of getting this sort of investment given the current state of investment markets and the collapse of the dot.com sector.
Glanbia provided the industry knowledge for Ingredientsnet.com, which provided an Internet-based business-to-business exchange which allowed users to buy and sell dairy ingredients, flour, sugar, edible oils and fats. Fyffes was providing the technical know-how for the portal, using the expertise it gained from its own worldofffruit.com portal for the fresh produce industry.
Industry sources said that the writing was on the wall for Ingredientsnet.com once Fyffes put the development of world offfuit.com on hold and wrote off its €15.6 million (£12.3 million) investment in the company. Fyffes had aimed to float worldoffruit.com on the Nasdaq market but this was abandoned when it became clear that investment interest in dot.com companies had disappeared.
Ingredientsnet.com's chief executive, Mr Tom Galvin, said there was a high level of satisfaction among users of the site and a good take-up from international food companies. "However the company has significant capital requirements to progress to profitability, which it was originally planned would be sourced from external investors. With this capital currently unavailable, regrettably the decision was taken to suspend operations."
The US's largest online grocer Webvan Group said yesterday it would file for bankruptcy protection and had stopped operations, terminating the employment of its 2,000 workers.
For the past several months, Webvan had acknowledged that it was in a fight for its survival, as its cash reserves ran low and operating costs proved higher than planned. The company said it intended to file for protection from creditors under Chapter II of the US bankruptcy codes. Webvan has no plans to resume operations and it will pursue an orderly wind-down of its operations and sale of its assets and business.
It also will not implement the one-for-25 reverse stock split shareholders recently approved. Instead, it expects its common stock to be delisted from the Nasdaq National Market. -(Reuters)
