Online Article Page Exclusives
Industry Exclusive: Dai Nippon Purchases Konica Paper Plant; Will Output Silver Halide, Dye-Sub Papers Insider

Dai Nippon Printing Co., Ltd. has purchased the paper production facility of Konica Minolta in Odawara , Japan , with the plan to use it for the production of receiver paper for dye-sub media as well as continuing the production of silver halide photographic paper, according to a company announcement in Japan .

Outside sources indicate that DNP did not acquire the Konica name but will manufacture the silver halide paper under a different brand name(s), not yet announced. Manufacturing will continue with the Konica-developed A-9 analog paper as well as the Centurian digital paper, according to those sources. DNP said it expects to ship the silver halide paper to markets internationally beginning Oct. 1. Production of dye-sub receiver paper is scheduled to begin at the facility in 2008.

It stated that it also acquired two other businesses from Konica Minolta on July 1 that will run as DNP firms: DNP ID Imaging Co., Ltd., for ID photo booths; and, DNP Photo Supplies Marketing Co., Ltd., for sales of photo related products in Japan .

DNP claims to “capturing top global share” of the dye-sub media market, a product it has been manufacturing since the late 1980's. It became a major investor in Pixel Magic Imaging, San Marco , TX , in 2004.

Konica Minolta has another paper manufacturing facility in Greensboro , NC , where it has been producing silver halide paper for its own brand as well as the Mitsubishi brand. It is understood that paper coating will cease at that plant by the end of December with the last shipments to be made in March. Once that facility shuts down there is some question as to the future of Mitsubishi paper.

The DNP decision to manufacture silver halide paper could surprise some as it comes at a time when the demand for that paper has been declining since it peaked in 1999-2000 when double prints were in vogue. Printing at retail from digital media has been increasing faster than many expected but not at a rate to offset the loss to film. According to an informed industry source there will be more prints made from digital input than from negatives by the end of this year and estimated that silver halide paper consumption could bottom out by 2008.

Agfa dropped out of the paper business last year. With the possibility that Mitsi may choose to do the same, it would leave the industry with two major players, Fuji and Kodak, and whatever plans DNP may have for paper distribution.

One possible scenario: DNP views the silver halide paper market as an opportunity now that Kodak and Fuji have set somewhat higher market prices within the past few months. Assuming that they took over the Konica Minolta facility at a fire sale price (who else would have been bidding, after all?) and with the possibility that Mitsi might be looking for a new production partner, DNP may feel they can grab some market share on silver halide with Mitsi, long the industry price leader, becoming its distribution outlet. As silver halide paper sales decline DNP would be able to gradually shift production to its dye-sub media, a product with a growing demand.

Currently, silver halide remains the most economical method of print output, costing about 5-cents for a 4x6 compared to 12-16-cents for a 4x6 from dye-sub media. That gap has been closing for the past few years as dye-sub media pricing has been declining—especially to major users.

Konica Minolta announced its decision to withdraw entirely from the photo business in January. It produced its last minilab in March. An arrangement was made with Noritsu to assume all service and parts responsibilities for the Konica machines still in the field. In the U.S. , there are currently 819 Konica minilabs at retail locations, according to sources.

Konica EcoJet chemicals, under the Trebla name, will continue to be manufactured in Germany by Tetenal, and while they are imported into the U.S. by Noritsu, distribution is being handled by CPAC.

Konica's biggest minilab customer in the U.S. was the Winn Dixie grocery chain which has had its own problems over the past two years. Konica recently took back 118, ‘R' series digital minilabs from Winn Dixie and it is expected these units will be disposed of on the international market or traded to other retailers who may wish to upgrade their older QD-21 systems.