Friday, August 24, 2012

Keep it–with Kodak

This morning over breakfast I learned that Kodak's current management team are divesting themselves of their chief asset and for most people their most recognisable product–their film division.

The current state
Kodak over the last 10 years have consolidated the production plant, it is now the most efficient film coating facility in the world–it can't downsize any more because only building 38 is left as far as I know they have two coating lines–the film division is profitable.
Edit: Kodak are still making film, they haven't 'killed it off' like some people in digital camera forums have suggested, production continues while they look for a buyer.

So what next? 
This situation is a make or break one for Kodak Film, the positive being the fracture between top board members who have been hammering the giant into the ground pursuing the consumer ink-jet market and those on the ground who passionately believe in their great product. Once these two have parted company those who run the film division and actually believe in film should be able to reach consumers, meet their needs and hopefully develop the niche.
The negative being that the economy is bad, costs of raw materials like silver are rising pushing up the cost of the end product in a time where people have less disposable income.

Who could buy the division?
It is hard to see another film based company buying the plant with rising costs and sale.
In the current climate no one is going to want to expand, so that leaves us with a venture capitalist possibly backed by money from business or some party with a large interest.
But remember how GM nearly collapsed, yet people are buying cars sad fact is people aren't buying so much film–the one player with the best quality product is profitable but not well managed.
The next six months will tell us how it will 'pan' out. (intended pun in quotes) 

© Photo Utopia 2012