Doom, Gloom and Reality

Ian Grant · May 27, 2005

With Agfa's new problems, Forte producing on an ad-hoc basis when they have sufficient orders paid for upfront. it's time to be realistic.

The whole photographic film & paper market is in the middle of massive downsizing particularly in professional markets and particularly B&W.

Agfa's problems are little to do with the B&W market, more to do with competing with Kodak, Noritsu and particularly Fuji in the highly lucretive photfinishing market supplying Minilabs and associated paper and chemistry. I know from experience here in the UK that Fuji are particularly aggresive in marketing and tying up exclusive minilab/paper/chemistry deals.

Forte must be having problems with their work force as they aren't in full time production, and their administrators don't appear to have yet made a decision about their long term re-structuring and future.

Ilford however stated quite clearly after their management buy out that they expected the B&W market to shrink a little further before levelling out and stabilising sometime around about 2006

We should remember that other companies also have spare capacity and Kentmere have entered the US market actually increasing their range to meet demand. Foma and EFKE are also looking to maintain production, and there are plants in Russia & China which I know companies like Fotoimpex are investigating.

So if Agfa went completely, or Forte ceased production there's plenty of companies who can fill their place in the market with the products we require.

It should also be remembered that we are all able to obtain a far greater variety of film & paper types compared to 20 or 30 years ago.

So it's time for reality to kick in there is over capacity so manufactures will go and our suppliers to become more resourceful in finding alternative manufacturers.

Ian

Eric Rose · May 27, 2005

I'm with you Ian. Life goes on. Heck they still make bias-ply tires.

arigram · May 27, 2005

Well said Ian. My thoughts exactly put to words.

aldevo · May 27, 2005

Ian Grant said:
Forte must be having problems with their work force as they aren't in full time production, and their administrators don't appear to have yet made a decision about their long term re-structuring and future.

Ilford however stated quite clearly after their management buy out that they expected the B&W market to shrink a little further before levelling out and stabilising sometime around about 2006
Ian

Well, regarding your first point - that's just specualation. I'd say a more plausible explanation than workforce problems is that the administrators aren't securing sufficient funds to continue production at full song.

Ilford? Let's be realistic. What else would the management say to secure funds for a buyout? They're going to try to walk a fine line between having to guarantee their investors immediate return on investment and not painting a "doom and gloom" picture.

AgfaPhoto, however, was a shock. I would have expected that they would have secured substantial seed funding from Agfa as the formation of AgfaPhoto would have spared Agfa substantial charges in having to lay off their film unit's work force. That they did not secure siginificant funding or that they burned it off in such a short timeframe is very distressing.

Ian Grant · May 27, 2005

aldevo said:
Well, regarding your first point - that's just specualation. I'd say a more plausible explanation than workforce problems is that the administrators aren't securing sufficient funds to continue production at full song.

As the Forte factory was closed and only effectively reopens for each production run those remaining staff have no secure employment at the current time.

Many of the problems with B&W papers etc is that shops, pro dealers and importers have drastically cut their stock levels, with only larger outlets having paper on the shelves in many cases. This caused the dramatic drop of factory output which hit Ilford and Forte, actual sales to photographers did not drop as fast or by anything like as much, but lack of supply on the shelves really does not help.

Ilford & Forte both had to stop their losses by only supplying to pre-paid order. So of course Forte's administrators don't have sufficient funding to produce materials for stock unless they secure substantial re-funding.

Raising funding in the UK is far easier than in Hungary and Ilfords marketing and sales team is far more experienced, I'm sure their market predictions are sound and of course they stand to gain the most in the B&W market if Agfa does cease trading.

Apart from Ferrania, (in administration), Agfa has for quite a while been loosing market share and most people in the industry were suprised it was Ilford that called in the Administrators last year and not Agfa.

Ian

juan · May 27, 2005

I wonder if lack of certainty in the acceptance of the EU constitution may have something to do with it. After all, investors don't invest, and employers don't hire in insecure environments. France's vote this weekend may produce interesting results.
juan

Photo Engineer · May 27, 2005

Eastman Kodak just announced the closing of its new Brazil paper plant. The plant manufactures color and B&W papers. The reason given was the decline in conventional photography.

PE

Claire Senft · May 27, 2005

Where do I get bias ply tires?

aldevo · May 27, 2005

Photo Engineer said:
Eastman Kodak just announced the closing of its new Brazil paper plant. The plant manufactures color and B&W papers. The reason given was the decline in conventional photography.

PE

They did announce a closure in Brazil, but I thought EK had two or three coating facilities in Brazil.

Photo Engineer · May 27, 2005

Aldevo, I really don't know. I thought they had one. This one is specifically for paper, and the article I saw only mentioned color paper. I guess I got it wrong. I have B&W paper from Brazil but color paper from the US so that misled me.

PE

fschifano · May 27, 2005

Claire Senft said:
Where do I get bias ply tires?

B&W film I can obviously understand. Why on earth would you want bias-ply tires? Nasty things!

c6h6o3 · May 27, 2005

While we can indeed still buy a plethora of various films and papers, I only really care about one: Azo. I can use other films should they discontinue my beloved TMY, but there is absolutely no subsitute for Azo, and it's made in Brazil.

I have not been particularly disturbed by previous announcements of plant closings by Kodak, but this one is truly distressing.

Ian Grant · May 27, 2005

Thats a very irrelevant political post.

Actually as I'm in the EU perhaps I should comment that its more about our wanting to retain our long and differing cultures and not being unwittingly drawn into a European equivalent of the US of A

I'm very pro the EU, the current referenda on the constitution are not what any of us wanted, its an economic union not a new super state.

Investors here pay little heed to what goes on in Brussells. After all each country has a right to veto anyway.

If you mean possible lack of investment in Forte, Hungary its more likely that unless the investment is internal the infra structure is still quite immature and a mnefield for outside investors.

So to finish the French are against the EU becoming more Anglophile & English speaking, all the former Soviet block EU member countries want greater ties with America, not forgetting the French think we British are far too pro America.

Vive La France

Ian

juan said:
I wonder if lack of certainty in the acceptance of the EU constitution may have something to do with it. After all, investors don't invest, and employers don't hire in insecure environments. France's vote this weekend may produce interesting results.
juan

Ian Grant · May 27, 2005

See the post by Micael A Smith on the Contact Printing section

Ian

c6h6o3 said:
While we can indeed still buy a plethora of various films and papers, I only really care about one: Azo. I can use other films should they discontinue my beloved TMY, but there is absolutely no subsitute for Azo, and it's made in Brazil.

I have not been particularly disturbed by previous announcements of plant closings by Kodak, but this one is truly distressing.

removed account4 · May 27, 2005

c6h6o3 said:
While we can indeed still buy a plethora of various films and papers, I only really care about one: Azo. I can use other films should they discontinue my beloved TMY, but there is absolutely no subsitute for Azo, and it's made in Brazil.

I have not been particularly disturbed by previous announcements of plant closings by Kodak, but this one is truly distressing.

i spoke with someone at kodak this afternoon, and he told me that they have no plans on altering productions of films and papers. he said they closed the plant in sao paulo and now some of the things that were being manufactured there getting made in manaus and other places. azo is not made in brazil but in canada.

maybe resin coated azo is made in brazil ? i don't know, and he wasn't able to tell me.

if they stopped making certain papers and films, oh well, it is just a product. film and paper can be bought other places, they may not be the same as what we are used to but there are other things available or that will eventually become available ... i feel worse for the 250 people who lost their jobs.

m_liddell · May 27, 2005

Fuji seem to be the only ones in the game who have had a decent business plan to deal with the impact digital has had. They saw the change and moved into the storage card market, digital paper etc.

I now shoot pretty much only Fuji film and this is a major reason why. They seem to have their heads screwed on, perhaps not with their S3 digital slr though....

I find the growth of places like retrophotographic et al selling film from smaller manufacturers interesting. This is the future I think.

c6h6o3 · May 27, 2005

jnanian said:
azo is not made in brazil but in canada.

I gratefully stand corrected.

jnanian said:
if they stopped making certain papers and films, oh well, it is just a product.

Azo is not just a product. It is a unique paper, and there is absolutely no substitute for it. As soon as I find out that no more master rolls of it will be produced, I'll immediately begin stockpiling.

removed account4 · May 27, 2005

c6h6o3 said:
Azo is not just a product. It is a unique paper, and there is absolutely no substitute for it. As soon as I find out that no more master rolls of it will be produced, I'll immediately begin stockpiling.

... that will be a sad day

Ian Grant · May 27, 2005

Go see the thread on the Contact Printing section.

Micael A Smith has been atively pursuing an alternative.

Ian

jnanian said:
... that will be a sad day

removed account4 · May 27, 2005

Ian Grant said:
Go see the thread on the Contact Printing section.

Micael A Smith has been atively pursuing an alternative.

Ian

i read that .. and that was why i suggested that if azo went away, there would most likely be other alternatives, which may not be exactly the same, but would fill the void ...

rbarker · May 27, 2005

From my perspective, it seems that only parts of the sky are falling. Old line manufacturers, it seems to me, were caught by the disharmonic convergence of various market factors, including digital. Those who can restructure their overhead, preferably without legacy elements of that overhead, will do well with the new market reality. Those who can't, won't. But, I'm confident that enterprising capitalists will fill any viable void.

Jorge · May 27, 2005

We should not loose sight that be it bankruptcy, closing, or whatever the people who own these plants want to recoup some money, the only way to do so is by selling the machines.....what are film coating machines good for? who would buy them? I get the feeling that someone somewhere would buy them and continue making film. Hell, if I had the money I would, I think Mexico is a perfect place for making film, great weather, cheap labor and close to the US....

David A. Goldfarb · May 28, 2005

I think they can be used for other purposes. I don't know if Ilford still offers custom coating services, but they were at one time.

hortense · May 28, 2005

I've been on a trip so maybe am not up-to-date on reports via APUG. However, look at this report on Kodak http://economist.com/displaystory.cfm?story_id=3974772

Ian Grant · May 28, 2005

Jorge said:
We should not loose sight that be it bankruptcy, closing, or whatever .....
what are film coating machines good for? who would buy them? I get the feeling that someone somewhere would buy them and continue making film. Hell, if I had the money I would, I think Mexico is a perfect place for making film, great weather, cheap labor and close to the US....

Actually Jorge your entirely right . . . . as usual

I live in a Carpet town, and my father ran a company that employed well over 4000+. It went into recievership 10+ years ago (my father had long retired, it was profitable but the owner went personally bankrupt, and it was too large for a competitor to take over) but all the looms are still working somewhere else. Another company closed and the entire palnt went to India.

So yes there's potential for coating plant to be bought cheap if companies do go and there are plenty of unemployed emulsion chemists around who have a wealth of experience.

Ian

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