Antalis South Africa, the Kodak distributor for Southern Africa, held a press conference on 1 February 2012, at which Komal Sharma, Sales Director Middle East and Africa and Vice President EAMER at Kodak, addressed Kodaks Chapter 11 business reorganisation. The message from both companies is that it is business as usual and that the graphic arts side of the business is strong and vibrant.
Antalis is sticking with Kodak and were going to see Kodak come through this as a stronger and better company, said Keith Solomon, Director of Antalis.
Forty percent of South African customers depend on Kodak equipment from Antalis. Solomon said that customers have reacted with a great deal of loyalty and that the company has even been awarded a major contract with a large South African printing and publishing company for Kodak products.
Sharma said that the restructuring would not affect Kodaks participation at drupa 2012 and that the company will showcase its current and future technologies across its portfolio of products as well as new product offerings.
On the Chapter 11 reorganisation, Sharma said, Its a tool that gives the company an opportunity to reorganise and restructure itself and to come out a stronger, more focused, competitive and sustainable global digital company. That was an objective when the company undertook the filing, which only applies to the US and its subsidiaries. Even in the US, business is functioning as normal.
Sharma said that most of the media coverage has focused on the consumer side of the business such as cameras and film but said that the decline of film was not new knowledge. He emphasised that currently, 75% of the business is digital and that 60% of the business consists of commercial printing and B2B division, which is what the company will focus on. He said that digital and commercial printing and graphic arts fall under Kodaks core business division. The other two divisions include growth and manage for cash, a division which its consumer digital cameras falls under.
Kodak has been reorganising for many years and it has been expensive. At the same time, the new products and services weve launched have also consumed a lot of cash and investments, which was necessary. The reorganisation gives us more time and flexibility to undertake and complete the remaining initiative to move Kodak forward.
There are four status objectives of the Chapter 11 filing:
1. To bolster liquidity in the US and abroad and for the company to have cash in its possession. This will help the company to continue its operations as normal while it is in the reorganisation process, which the company endeavors to complete in the next 12 – 18 months by 2013.
2. To monetise its non-strategic intellectual property, something the company has been trying to do since July 2011, and which has not been possible to do within the ordinary course.
3. To enable the company to resolve its legacy costs. Kodak has been re-structuring for many years and that has come with a fundamental change within our consumer business, driven by film. A lot of legacy costs still remain in our system and the business we have today cannot absorb all of these costs.
4. To enable the company to focus on its most valuable business lines.
Kodak owns patents on various digital procedures and has issued infringement cases against Apple, HTC and Samsung, among others. Our consumer digital patents form about 10% of our patent portfolio and we have monetised R23 billion ($3 billion) from those patents, which are very fundamental and relate to the way digital images are processed and transmitted wirelessly to any device such as a cellphone or a tablet. Any device which has a picture application has a fundamental Kodak intellectual property, which has been infringed by some players in the industry. Many have settled with us but many have not and we need to ensure that we get our fair share of the intellectual property that is being used by these players. This Chapter 11 filing will enable us to do that successfully, said Sharma.
For more information on the transformation process visit www.kodaktransforms.com