Kodak back from bankruptcy, with new sales strategy
Updated: 2013-09-07 10:27
By Shi Jing in Shanghai (China Daily)
The "great yellow father" of photography is back in the game, but with a very different strategy.
Antonio M. Perez, chairman and chief executive officer of Eastman Kodak Co, announced in New York on Tuesday the company's emergence from Chapter 11 bankruptcy as a re-organized company, following completion of the final steps in the restructuring process.
"We have emerged as a technology company serving imaging for business markets, including packaging, functional printing, graphic communications and professional services," said Perez.
The new orientation as a technology company indicates that Kodak is changing its role in customers' lives from being the "guardian" of family photos to a company "that has technology for everyday life", said Lois Le-begue, managing director of Kodak's Asia-Pacific region.
Kodak completed the final steps in its restructuring, including the spin-off of its personalized imaging and document imaging businesses to the Kodak Pension Plan, a long-standing pension plan of Kodak's United Kingdom subsidiary.
That restructuring, completed on Tuesday, signals that it has exited the business-to-consumer segment and will focus on business-to-business activities such as commercial printing. Kodak started to invest in its B2B business about eight years ago.
The company also successfully closed on an agreement for $695 million in term exit financing, paid off its debtor-in-possession lenders and second-lien note holders in full and completed its rights offerings, receiving approximately $406 million of new equity investments from participating unsecured creditors.
But Feng Hongjiang, a re-searcher at the China Brand Re-search Institute, warned that Kodak might be faced with more challenges from competitors in the commercial image printing industry, where Kodak has little advantage in core technology.
The commercial image market has been "growing exponentially in the emerging economies" at an average annual growth rate that could soar to 60 percent by 2015, according to Lebegue.
The growth has been especially important for the company in China. Over the past few years, China has been the headquarters of Kodak's Asia-Pacific region, contributing about 27 percent of global revenue.
Wang Bing, managing director of Greater China Cluster of Kodak (China) Investment Co Ltd, said that Kodak China has been maintaining double-digit growth in the past few years, even though the country's growth rate has slowed.
"At present, about 70 percent of the revenue achieved in the Chinese market comes from the maintenance and services provided to Kodak's products. This will be the future trend as consumers become more digital with less demand for printing pictures. This kind of service is also unaffected by economic cycles," he said.
Wang added that Kodak is keeping an eye on the hot topic of 3D printing. But he said the time isn't yet right to expand 3D printing at Kodak.
Kodak, founded in 1888, began to face financial problems in the late 1990s because of a decline in the sales of photographic film and its own slow transition to digital photography. In January 2012, Kodak filed for Chapter 11 bankruptcy protection.
A month later, Kodak announced that it would cease making digital cameras, pocket video cameras and digital picture frames and focus on the corporate digital imaging market.
In August last year, Kodak announced plans to sell its photo-graphic film, commercial scanner and kiosk operations as a measure to emerge from bankruptcy.