Struggling US photographic giant Eastman Kodak Co has unveiled plans to invest $1bn in China in a bid to get itself back on its feet and grab market share in a perceived emerging market. The company hopes to establish itself as the main photographic player in China, a market it believes will grow to become […]
Struggling US photographic giant Eastman Kodak Co has unveiled plans to invest $1bn in China in a bid to get itself back on its feet and grab market share in a perceived emerging market. The company hopes to establish itself as the main photographic player in China, a market it believes will grow to become larger than Japan and eventually the US. The investment will be injected into China over the next few years to improve manufacturing capacity and extend distribution and marketing capability, relating to the production and sale of sensitized photographic materials. Kodak will work with Chinese authorities to help achieve its aim. The company has established two new companies to manufacture photographic products in China, Kodak (China) Company Ltd and Kodak (Wuxi) Company Ltd. In addition to the new companies, photographic operations Shantou Era Photo Materials Co Ltd and Xiamen Fuda Photographic Materials Co Ltd will transfer their assets to Kodak China, and Wuxi Aermei Film and Chemical Corp will transfer its assets to Kodak Wuxi. Kodak will make what it describes as substantial investments in these operations. Kodak will own 80% of the shares of the China company and 70% of the Wuxi operation. Both of the new companies will have David Swift, current president and chairman of Kodak’s Greater China Region, as their chairman. The company has said the investment will increase its revenue, market share and earnings over time. The Rochester, New York operation has to do something to get itself back on the rails after suffering from poor financial results last year that resulted in large staff cuts. Last November Kodak announced a $2bn restructuring effort that saw the loss of 10% of its workforce or 10,000 people (CI No 3,288), and a month later said 16,600 jobs would have to go (CI No 3,315). At the moment Kodak plans to use its greater manufacturing capacity to serve other parts of Asia, as well as China. The two new companies will initially employ 2,000 staff, adding to the 600 who are already based in China. The companies shares were trading up slightly at $63.875 on the back of the news as we went to press, but were a long way from their year high of $85.125 reached last June.