konika-Minolta not doing to well

Discussion in 'Minolta' started by Rich, Nov 10, 2005.

  1. Rich

    Rich Guest

    Falling sales of conventional photo film and intense competition in
    the market for digital cameras saw Japan's Konica Minolta slump into
    the red at the interim stage, and to forecast a large full-year loss.

    The group, formed through the 2003 merger of Konika and Minolta,
    warned that conditions would grow even more difficult in the future.

    The Japanese maker of camera and office equipment said on Friday that
    it had made a net loss of 3.48 billion yen (29.57 million dollars) in
    the first half to September, reversing a net profit of 8.20 billion
    yen a year earlier.

    Operating profit rose 21.2 percent to 39.41 billion yen thanks to a
    robust performance at its optics operations, while sales fell 3.3
    percent to 517.60 billion yen

    Konica Minolta is struggling as it tries to adapt to the rapidly
    changing shift to digital photography and away from traditional film.

    "Market demand rapidly and dramatically decreased with the surge of
    digitization, which was much faster than our forecast, and we expect
    this trend will further accelerate in the future," the company said in
    a statement.

    Konica Minolta plans to slash its global workforce of 33,000 by 10
    percent in response to falling demand for conventional photo film
    while streamlining its production facilities and sales network.

    It now expects to post a net loss of 47 billion yen for the full year
    to March, reversing an earlier forecast of a net profit of 23 billion

    The expected loss will largely reflect 90 billion yen in charges the
    firm will allocate for restructuring as it sharply reduces its
    exposure to conventional photo film.

    "We will work out details of a fresh turnaround plan by the end of
    this year and when completed, the size of the (imaging) business may
    fall to below 100 billion yen (in annual sales)," said Konica Minolta
    president Fumio Iwai.

    Konica Minolta currently generates revenue of around 200 billion yen
    annually from its photo-imaging business, which covers digital
    cameras, conventional cameras, photo film and printer paper.

    "We had earlier planned a 'soft-landing' (from our restructuring) of
    the business but due to a rapid deterioration of the business climate,
    we need to accelerate the reform process," said Iwai.

    "But we have no intention of withdrawing completely from any of our
    existing product lines, including digital cameras," the president

    © 2005 AFP
    Rich, Nov 10, 2005
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  2. What is actually happening is that Konica slide film, 100 speed neg
    film, 800 and 1600 speed neg film, all black and white stock and
    infra-red lines are being discontinued entirely. Only 200 and 400 will
    remain in negative only.

    Colour paper production is being increased, and the European plant is
    enjoying greatly increased sales, along with photo chemistry, as a
    result of the closure of Agfa very recently. The UK Konica Minolta HQ
    reckons that Fuji will take some former Agfa minilab business, Kodak is
    now very weak and unlikely to try to compete, but Konica papers and
    chemicals are (guess what?) highly compatible with Agfa systems and also
    very favourably priced. Minilab sales, for digital output, are expected
    to rise in the UK and on this basis the KM UK unit is feeling very
    confident about 2006.

    This week the camera and inkjet papers division launched a whole new
    advertising campaign, booking space across all the key publications in
    the run up to Christmas. The Dynax 5D has exceed all expectations and in
    the emerging Chinese market, where Minolta has always been the number 1
    brand due to the licensing of Minolta mounts for the past two decades,
    Konica is the number 2 minilab and materials source after Kodak (Fuji
    has little presence in this market - selling 'Fuji' brand in China is a
    bit like selling 'Swastika' German branded film in Britain!).

    Like Kodak, Konica has been a big manufacturer of film, but more like 3M
    as far as hidden sales go. Much rebranded stock is Konica mf; they were
    responsible, for example, for the whole of Ilford's colour film brand in
    the 1980s. It's falling film sales which have hit Konica, and it is the
    cost of shutting down emulsion coating lines which can not just be
    switched to making inkjet papers that creates the projected loss.

    I have asked whether it is likely the film lines will be sold to China,
    since the Chinese market is the largest film user in the world and
    digital has hardly had any impact there yet. No clues given. I am pretty
    sure they will do that, they have done it with almost all their other
    decomissioned plant - Minolta traditionally has sold all its plant,
    tools and design rights to Chinese makers after ending lines.

    David Kilpatrick, Nov 10, 2005
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  3. Paul from KM UK went to China recently. He was mainly struck by the age
    of the Kodak installations - many with hand-painted signs, and in older
    developments. Konica minilabs, as in the Middle East and Africa, have
    very modern signage and are generally in prime positions, with much
    newer kit. Kodak still is the largest name by far.

    From my last trips to Turkey and Morocco, similar situation - Konica
    minilabs very prominent, excellent signage and presentation, but Kodak
    film often the only stock on sale generally. Kodak is differently packed
    and branded for those parts of their EAMER region, and a few years ago
    there was a major problem with re-importing a type of Kodacolor 200 only
    intended for Mid-East/North African sale, to the UK. People thought it
    was counterfeit as the packaging was so crude. It was not - it's just
    special stock intended to survive being stored at high temperatures in
    kiosks in souks for years before finally selling!

    David Kilpatrick, Nov 10, 2005
  4. Rich

    Paul Coen Guest

    In all fairness, they had a Maxxum-mount DSLR in 1995, the RD-175. Far
    too early in the market, and while it was a bargain compared to the
    Kodak cameras on the market at that time, it was still a couple of
    grand. Once it tanked, I suspect it made them gun shy. Not that it
    really matters today, but it's an interesting detail.
    Paul Coen, Nov 11, 2005
  5. It didn't 'tank'. The RD-175, in common with several other Minolta
    products which might surprise people, was a custom order for a
    particular market sector - the consumer (!) got the chance to buy it was
    well, but the camera was built for a purpose and preordered. Same as
    their previous digital still video backs. For certain of their markets,
    Minolta were in digital capture as early as Kodak.

    Another item which was a specific order is the 35-70mm macro 3X zoom.

    This situation is not unique to Minolta/KM. All the major makers have
    produced lenses, bodies and other gear on the strength of a pitch to
    military or civil organisations capable of placing a large enough order
    to put the item into production.

    David Kilpatrick, Nov 11, 2005
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