Magazine Article


AgfaPhoto Spins In New Directions

For as long as most anyone can remember it, the Agfa name has been associated with film. With the recent sale of the consumer imaging division by Agfa's parent company, Agfa-Gevaert, though, that all could change. But not necessarily in the way many have reported it.

In a recent one-on-one interview with PTN, Bing Liem, president of North American operations for the new imaging spin-off, known as AgfaPhoto, said the company will continue to manufacture film but will also branch out into newer—decidedly digital—frontiers.

"Right now, we're looking at the total category of photo as an opportunity," Liem said. "So, as retailers start to look at digital and the options it presents, we want to be able to be a total solutions provider for them."

What that means, Liem explained, is that along with providing roll film and digital minilabs to photo retailers, AgfaPhoto's name may soon be turning up on inkjet cartridges and inkjet paper as well as on memory cards and other forms of digital storage.

"We're completely aligned to try to find solutions for our retailers," he said. "Everything's open."

When asked to elaborate, Liem hinted that Agfa also had its eyes on bringing an inkjet minilab to market as well as delving into the lucrative home inkjet market.

The changes at Agfa could not come soon enough, according to some observers. The Belgium-based Agfa-Geveart had been trying to unload its imaging division for years so it could focus on other markets. The advent of digital and the increased competition from Kodak and Fuji did not help matters much as Agfa has found itself relegated to a veritable third-string imaging company. The sale in August of the Agfa Consumer Imaging division in a management buyout for 175.5 million Euros presents a fresh start for AgfaPhoto while, in turn, helping to streamline Agfa-Gevaert.

"The photo activities are the origin of our company and an important part of our history. Divesting them was not an easy decision," said Ludo Verhoeven, CEO of Agfa-Gevaert.

The European markets responded well to the divestiture with shares for Agfa-Gevaert surging by more than 15% following the sale. Verhoeven said Agfa-Gevaert will now focus its attention on healthcare and graphic systems.

With a closing date of November 1, 2004, the sale of the consumer imaging division will create AgfaPhoto, a private company owned by NannO Beteiligungsholding GmbH, managers and two minority shareholders Abrams Capital and Highfields Capital, both U.S. based institutional investors. The sale is being handled by Goldman Sachs.

Liem said the stripped down new company, which will include an estimated 2,870 employees, will be an advantage in a quickly changing photo market.

"The separation is what we've been working for," he said in a phone press conference following the announcement. "It enables us to implement our strategies with lightning speed. We can finally run the business as a medium-sized company." The company will be headquartered in Leverkusen, Germany, with North American operations based in New Jersey.

In his interview with PTN, Liem also trumpeted the benefits of having a smaller company. "A lot of the moves we wanted to make, we had to get the blessing of our parent company. This really gives us the ability to move on and do what we want. It provides a tremendous amount of freedom."

Similar to its current business of providing retailers and chains with private label versions of its films, AgfaPhoto has explored the possibility of offering private label versions of media cards. Liem said the plan had already been test marketed in Europe.

1 2 next