Kodak to sell off film division [UPDATE]

Kodak has made the decision to sell off its film and paper divisions, as it continues to restructure its business around printing

Author: Olivier Laurent

24 Aug 2012 Tags: Kodak

Kodak is looking to exit the film business, announcing that it would be selling its Personalized Imaging and Document Imaging departments, which encompass digital scanners, picture kiosks, souvenir photo products, photographic paper, as well as Kodak's legendary film businesses.

The news comes as Kodak continues to restructure the company as a printing business. "The initiation of a process to sell the Personalized Imaging and Document Imaging businesses is an important step in our company's reorganization to focus our business on the commercial markets and enable Kodak to accelerate its momentum toward emergence," says Kodak's chairman and CEO Antonio M. Perez. "In addition, we continue our initiatives to reduce our cost structure and streamline our operating models in an effort to return the company to profitability."

Kodak hopes to sell off the Personalized Imaging and Document Imaging businesses before June 2013, but it has moved to reassure photographers that it would seek buyers that share the firm's commitment to photography.

In a statement, Perez says that Personalized Imaging and Document Imaging divisions continue to be "valuable businesses that enjoy leading market positions as a result of superior products and service offerings. We remain steadfast in our commitment to our customers, and we will work to ensure that they continue to receive the exceptional levels of quality and service they have come to expect from Kodak. Customers remain the top priority of all our businesses - those we intend to sell and those that will remain part of Kodak."

A spokeswoman for Kodak tells BJP that prospective buyers will be able to use the Kodak trademark with all future film products.

She adds that Kodak "will continue to manufacture all its products (pro film, etc.) during this time [of transition]."

Kodak expects that the sale of these assets, as well as its continued cost-reduction initiatives, the curtailment of its legacy liabilities, and the monetisation of itsdigital imaging patent portfolio, "will be significant milestones toward completing the company's reorganization and emergence from Chapter 11 during 2013."

In his statement, Perez reaffirms his goal to transform Kodak into a printing company, claiming that it has the "broadest portfolio solutions - and enterprise services." He adds: "These businesses have substantial long-term growth prospects worldwide and are core to the future of Kodak. We are confident that our competitive advantages in materials science and deposition technologies, as well as our know-how in digital imaging, will enable us to capitalize on those opportunities and extend our leadership in key growth markets."

The printing business is currently dominated by companies such as HP, Epson and Canon. Before joining Kodak, Perez worked for HP, where he served as president and CEO of HP's inkjet imaging division before taking on the post of president of HP's consumer business.

Kodak also plans to retain its Consumer Inkjet, Entertainment Imaging, Commercial Film and Specialty Chemicals businesses.

BJP's technology contributor Jonathan Eastland says the announcement could push more photographers towards digital photography. "In the short term, this latest snippet in Kodak's sorry on going saga to regroup and rebuild will push many more photographers still dabbling with film but teetering on the edge of the digital divide, over the cliff. They'll simply give in to the inevitable, faced as they surely will be with ever increasing costs-per-silver-frame and further contracting lab infrastructure."

In recent months, both Kodak and Fujifilm have increased the prices of their professional and consumer films.

Eastland adds: "On a more positive note, the news ought to present Ilford with a golden opportunity to net significant gains from the fall-out of Kodak film enthusiasts pondering a switch in allegiance. Fuji has colour but Ilford's HP5+ black-and-white emulsion is up there with Tri-X; they just need to do a lot more to raise their image profile."