It's business as usual for Kodak in Asia - exec

MANILA, Philippines - News of Eastman Kodak voluntarily filing for Chapter 11 business reorganization in the US Bankruptcy Court last month doesn’t exactly capture the total picture that the company is in.

In Asia, a strong region for the cash-strapped company, Kodak will continue in its normal course, Lois Lebegue, Kodak’s Asia-Pacific managing director for consumer digital and graphic communications groups, said categorically.

Meeting with a small group of local media last week, Lebegue said, “Kodak in Asia is not part of the filing for bankruptcy (protection) by the US office and its subsidiaries. The filing is for restructuring and reorganization to take care of the legacy pensions and other matters. We are not affected by it here in Asia, which is the most solid region for the company.”

Kodak in Asia, however, will naturally go along the company’s global restructuring that should see it focusing on its most valuable business lines. Lebegue said the plan is to exert three-fourths of the company’s resources for business-to-business (B2B) and one-fourth for consumer offerings.

“When Kodak is mentioned, many (still) think of pictures although it’s only less than a third of our total business, especially in Asia today,” said Lebegue. “For the last decade or so we have been moving our products from film. Now that the film has disappeared, our new focus is B2B and the consumer business.”

In a statement accompanying the Chapter 11 filing, the company touted its “pioneering investments in digital and materials deposition technologies” in recent years.

Antonio Perez, chairman and CEO of Kodak, said, “Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses.”

Consumer devices such as self-service photo kiosks, printers and high-volume document scanners accounted for about 75 percent of Kodak’s total sales last year that generated some $4.5 billion in revenue.

“The important thing for us to do is to connect the capturing and printing of images together,” said Lebegue. “For the enterprise we design workflow systems for managing images and designing printing solutions for B2B.”

Kodak’s business reorganization, meanwhile, will also involve the monetization of its non-strategic intellectual properties (IPs) which Lebegue said would only be about 10 percent of Kodak’s entire arsenal of IPs.

“And we can still use those IPs after we sell them,” he said. “The restructuring will allow us to look at what makes sense to keep and what we don’t have to.”

But there’s never a short supply of naysayers who believe Kodak can no longer keep up with companies it once lorded over, and that the “Kodak moment” is over.

Lebegue argued, however, that in any restructuring there would be good and bad moments and while Kodak is experiencing the latter he said they are ready to do the hard work of becoming more nimble to make the transition to the future.

“Are we going to make it? Our markets are still here,” he said.

Kodak today employs over 4,000 core people in Asia (12 in the Philippines) where it has six manufacturing plants, 14 subsidiaries and three R&D centers. As a whole, Asia represents a $1.5-billion business for Kodak, Lebegue said.

Elsewhere in the world, Kodak has already closed 13 manufacturing plants and 130 processing labs and reduced its workforce by 47,000 since 2003. The filing for bankruptcy protection is part of that transformation which will now be led by Dominic DiNapoli as chief restructuring officer.

Founded in 1892, Kodak made photography accessible to the masses. In the Philippines, the brand name has become a local term — kodakan — which means to take pictures.