Fujifilm / Kodak: shrink to fit

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If Kodak’s name will for ever be linked with the demise of cameras that use film, regardless of their retro-cool status and however little film it now makes, how much worse on that basis to be called Fujifilm? But Kodak’s Japanese rival seems to manage nicely.

Kodak is emerging from 19 months in bankruptcy with five years of losses totalling $3.5bn to its account. Over those same years, meanwhile, Fujifilm suffered just one loss and produced a net $1.6bn of profits. It is not as if Fujifilm faced different pressures: sales at its imaging business have shrunk by an average one-tenth a year for the past decade, with no operating profit in almost as long. Its success has come from other units, namely 75 per cent of Fuji Xerox, its copier venture with the US group. That covers about half its sales and operating profits. The rest came from what it calls information solutions and others might term a typical Japanese hodgepodge, since the units range from cosmetics and endoscopes to film for flat panel displays. Still, endoscopes are a natural fit for its camera expertise and the FPD film follows from its photographic skills. Curbing the oxidation of collagen that causes skin ageing is in fact similar to fighting faded film. But even Fujifilm’s ability to redeploy its expertise has been only mildly successful: profits have grown by an average of 1 per cent a year for the past decade and sales have slipped at about the same rate. At least the result is a slightly better net margin.

Fujifilm and Kodak will one day feature as case studies on dealing with industry decline. Kodak, the disrupted, now plans to disrupt the worlds of packaging and print while Fujifilm is talking more mildly of “moving firmly on to growth”. Those interested must get to grips with a bewildering array of technologies. Oh, for the old days of spooling fiddly film into cameras.

Email the Lex team in confidence at lex@ft.com

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