LatAm Company Expands B2B Services

LOS ANGELES (05/01/2000) - Chilean company Chilnet SA is greatly increasing the reach of its B2B (business-to-business) portal beyond its home market. The move comes as the company draws upon its ten years of experience in providing business information to Latin American companies and as Internet startups boom in the region.

The portal, at http://www.mercantil.com/, is operated by Mercantil Inc., a Chilnet subsidiary.

Owned by Chilnet and BancBoston, Mercantil last week launched its B2B portal in Argentina, and by the middle of this month will do the same in Brazil, as part of its expansion plans. The company's plans include an IPO (initial public offering) by the second quarter of next year along with mergers or acquisitions in Brazil, Mexico and Argentina, Mercantil Chief Executive Officer Jaime Vargas said in a phone interview last week.

Later this month, Mercantil will open offices in México and Miami, where the company plans to transfer part of its headquarter operations, which are currently based in Santiago, Chile, according to Vargas. By the end of this year, the company expects to cover at least ten countries in Latin America, he added.

Mercantil.com provides a database of more than 1 million Latin American companies mainly aimed at small and medium-sized Latin American companies and at the rest of the business world interested in investing in the region, Vargas said. The firm also provides Net content, a store and helps leverage business opportunities in the area.

In the near future, Mercantil.com will integrate all the companies who agree to make transactions through the portal into a business community. "So at the end, it will be an end-destiny site," Vargas said.

Since its foundation last year, Mercantil claims to have an average of 2 million monthly page views, which should increase to 3 million starting this month, Vargas said.

Also this month, Mercantil will begin a financing round to raise US$30 million, expected to close by July. The money will be used to finance the company's operations during the second half of the year.

"We are not afraid of all the current barriers to the Internet and e-commerce, because its irreversible growth in the region will enhance alliances with important players, which will force governments to speed and improve their regulations," Vargas said.

"The Internet can be used as a weapon of pressure and there will also be a leapfrog effect in the region, because Latin American companies have learned from the errors of U.S. companies," he added.

Mercantil is evaluating alternatives for acquisitions or mergers with at least one company in Argentina and Mexico and the firm already has an alliance with Brazilian Web design company Connection.net.

Vargas said that currently the company has an average annual revenue of $1 million, that it expects to increase to $2.5 million by 2001. The company's earnings resources are its Web site, store sites, e-catalogs and advertisements, according to Vargas.

Mercantil Inc., in Santiago, Chile, can be reached at http://www.mercantil.com/.

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