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A Kodak Moment?

Have you ever found yourself in a situation where you wished someone nearby had a camera to take a picture? This could be a horribly twisted event or one of the sweetest things that has happened to you. Well there is an expression for these awkward, funny or memorable moments, or dare I say lapses. It’s called ‘a Kodak moment’. In a nutshell it means to save a moment of life on film for posterity. There is no doubt that Kodak’s brand is synonymous with film and photography, the way the Xerox brand is with copying and Hoover is with vacuum cleaning. But to be fair, Kodak is much more important because it deals with human emotions and memories.

Kodak technology touches our lives in many ways. From mobile screens, to colour images, to photography; you name it.  Kodak’s technology is part of our everyday life. But Kodak today is merely a shadow of an empire that we all knew and respected. The company divested its consumer business almost entirely. The company’s workforce has shrunk considerably and it has been plagued by restructuring and debt woes. Am I being too harsh?  Maybe, maybe not. Luckily I found a chance (let’s call it my Kodak moment) to talk to a top authority from Kodak to find out more about company’s plan for the future. His name is Lois Lebegue, managing director, ALMA region and vice president of Eastman Kodak Company. For those of you who have been living in a deserted island with no communication with the outside world during past few months, I should say that based on the recent organizational changes Kodak has combined its regional structure from four to two mega regions: Europe, United States and Canada, Australia and New Zealand (EUCAN) and Asia, Latin America, Middle East and Africa (ALMA). Lois Lebegue‘s profile is impressive: From January 2012 to December 2014, he was Managing Director of the Asia Pacific Region (APR).  He was elected vice president by the board of directors in January 2015. Since 1989, Lebegue has worked for Kodak in a variety of capacities in both Europe and in the United States in multiple business units and markets, including product management at the worldwide level. Under his leadership, the European, African and Middle East Region Document Imaging business saw significant growth in digital revenues and profitability.

In Asia since mid-2005, Lebegue has established and managed a successful Digital Print business, creating strong teams and market positions throughout Asia Pacific, and doubling revenues and earnings. He was also the head of Kodak Japan and Korea operations and lived in Tokyo, Shanghai, and now Singapore. I met with him in Kodak’s office in Dubai Media City. I had already sent my questions for review. I am kind of used to this policy of big corporations. Top managers of top corporations don’t like surprises, especially in a complicated region such as Middle East. Lebegue is soft spoken and he also speaks Spanish (but that’s another story).

He had some interesting comments about my questions and our magazine. “I have received your questions. Some made me smile and some didn’t but I think they are all interesting and foundations for a great discussion. I have your magazine in my hand. I read it and I study it. I like the sharpness of what you are doing. It is always on spot,” said Lebegue. His introductory comments left a positive impression on me and from here on the dialogue was fluid. 

All The World In Two Regions

The latest organizational restructuring in Kodak divided the whole world into two very huge markets. Lebegue explains the rationale behind this strategy: “Before our recent restructuring the world markets were divided in four regions and very isolated from each other. For example, Middle East and Africa have more in common with Asian markets than with Europe. The entrepreneurship, aggressiveness and the need for value proposition in the Middle East are much closer to Asia than Europe. With the new changes we have an organization that is much more structured around type of markets and segments. I believe this is the right direction.

I reckon from the outside it seems that we are on a constant restructuring spree but the fact is we took the root to redesign the company in a progressive way. Considering the recent challenges and ups and downs we experienced we needed to resort to a mix of clear strategic direction and choices and at the same time try to maintain some stability in our approach to the markets. Step by step we are finalizing the redesign of the company and I believe we are achieving an attractive result. We have been able to cut layers in our organization so we can be closer to our customers. For example if you look at my business card you see my cell phone number printed on it so customers can find me immediately. As you are well aware we have a strong traditional foundation and this rule applies to our relationship with our customers.”

Traditional Foundation, Modern Technologies

There is no doubt Kodak is bringing modern technology to the market. The company recently introduced the world’s fastest black and white inkjet press, the Kodak Prosper 1000 Plus. Its SONORA processless plate is gaining market share around the world and in our region. NEXPRESS digital press is finding a foothold in the region and the first PROSPER 6000 press in the EMEA region will be installed in Masar next month. Does this mean that Kodak is all about new technology now? Lebegue says although Kodak is proud of its history the company is focusing on future. “At the moment we are a very future-oriented company. Our SONORA processless plates, PROSPER press, our packaging solutions or functional printing tools that we are developing for the future show our commitment to offer markets state-of-the-art tools which prepare our customers for the future. I don’t look much into the past.”

Okay, fair enough. But what about film? Recently six major Hollywood film studios have gotten together to help Kodak remain in the movie business. Apparently some filmmakers still prefer film for aesthetic reasons. Does this signal that Kodak is a brand that belongs in the past and to the people who are still looking for vintage technology rather than new ones?

“This is a very good question, albeit based on a wrong premise. Who says film is a vintage technology? Top directors such as Quentin Tarantino and Christopher Nolan virtually have been begging us to keep the movie film alive. All the major Hollywood studios are using Kodak film. Three of this year’s eight best-picture Oscar nominees — “Boyhood,” “The Grand Budapest Hotel,” and “The Imitation Game” — were shot on Kodak film. Modern filmmakers prefer Kodak films. Every technology is as good as what you do with it. People who go to movies and get all emotional about what they see on the screen don’t think how it was shot. They enjoy the ride. This rule applies to printing as well. When you buy a beautiful book with top special effects applied on the cover you don’t really care how it was made. You enjoy the feel and the tactile pleasure the book offers. So once again I would like to stress that Kodak is a very modern company.”

In many ways PROSPER 6000 embodies the futuristic vision of Kodak. There are only few machines installed in the world, one in China, two in the US and one will be installed in Masar in the UAE. Lebegue says he is not surprised that Masar has opted for this machine. “If you look at the countries that have already installed PROSPER 1000 and 5000 you’ll find out that this machine is not only suitable for mature markets but it also offers value proposition to printers in developing countries. We have installed PROSPER in four corners of the world, for example in Kuala Lumpur. This doesn’t happen too often, particularly in printing markets. Normally high-end products featuring high productivity first land in mature markets such as the US, Europe and Japan and eventually find their way to other countries around the world for specific applications. But PROSPER is different. It is high-end, high volume and at the same time universal.

“I believe printing has become an industry with lot of boundaries but limited frontiers. Boundaries in the sense that people don’t want to spend much time on logistics and inventory. This is particularly relevant in the publishing industry. On the other hand new technologies such as digital printing enables you to print whatever you want, whenever you want and whatever quantity you want. This is a fresh value proposition. In case of Masar their advanced vision is really a refreshing surprise for me.”

Consumer Market; To Be Or Not To Be?

After leaving behind the financial woes, it seemed to everybody that Kodak has no desire to return to the consumer market, for some time at least. But apparently that’s not the case. Kodak has released its own smartphone, the Kodak IM5 built by UK-based smartphone maker Bullitt. To tell you the truth this was a surprising move by Kodak. Especially in a saturated and tough market such as smartphone. But Lebegue has a strong argument for this seemingly controversial decision. “We have a lot of core strengths and technologies in our company but our most important asset, without a shred of doubt, is our brand. In many countries we don’t get any benefit from our brand. So there is a risk that our brand slowly vanishes and is wiped out from people’s memory in the consumer market. So we are testing the markets by introducing new smartphones and tablets in near future. With the help of our partners we are trying to enhance the visibility of our brands in different countries. We are not a manufacturer of smartphones but we have a brand that has lot of value in consumer space.”

New Distribution Structure For Plate Business

Kodak has high hopes for SONORA processless plates. Kodak’s major plate distributor in the region used to be Heidelberg but after Heidelberg joined forces with Fuji, the German giant is now offering Fujifilm plates. On the other hand Kodak has a number of plate distributors in the region including Dynagraph. So after the initial hiccups it seems that the transition has been finalized and Kodak has strengthened its distribution channels in the region. The question is what strategy SONORA plays in Kodak’s overall approach to the market. Lebegue explains: “It plays a very vital role. SONORA has a special place in our customers’ hearts, minds and wallets. Using Sonora, a printer is able to save on consumables, time, energy, labour and waste. Also SONORA offers the possibility to printers to come up with innovative printed materials. Using SONORA, printers are also able to save money. It is environmentally friendly. In China there is a huge demand for SONORA for the environmental benefits it offers. 40% of newspaper plates used in Brazil are SONORA. Kodak has several plate manufacturing sites across the globe including the US, Europe, China and Japan. Each manufacturing site can compensate for the shortcomings of another site in case of a natural disaster, similar to the tsunami in Japan.”

Following my interview with Lebegue I had the opportunity to meet with some printers in the UAE who were invited to the Kodak office. According to these printers the imaging speed of SONORA plates has been increased dramatically. However, the readability and contrast of the plate still needs improvement.  

Numbers Please

Once again I tried to get some concrete numbers about the sales performance of the company or any other relevant figures. As I already suspected my efforts were futile. However, Lebegue did offer some figures especially during the meeting with Kodak’s UAE customers. According to Lebegue, printing is a 440 billion-dollar industry and it’s growing. Meanwhile, packaging is experiencing a higher growth. The value of packaging market in 2011 was around 250 billion dollars and today it has exceeded 300 billion dollars. “Other technologies such as printed touch screen tablets are growing at a staggering rate of 60 to 70% year on year. Ironically the number of printed pages is not decreasing as everybody envisaged a decade ago. During Q4 in 2014 printed books experienced, for the first time after several years, a modest increase on the year over year basis. For Kodak, ALMA region is a fast growing market responsible for 40% of company’s total business.” However, Lebegue claims unlike other companies mature markets are still a growing source of income for Kodak, thanks largely to the products such as SONORA, NEXPRESS and PROSPER. NEXPRESS has been a profitable product for Kodak. It started as a joint venture with Heidelberg but later Heidelberg decided to pull out altogether from the project and Kodak was forced to continue alone. But Lebegue says it worth it. “The machine has been very successful around the world. The long sheet version of the press launched recently is suitable for office environments as well. Kodak also created a market around NEXPRESS toners selling it to customers who are keen on using it in in their own digital devices.” According to Lebegue the quality of the toner is so good that other companies are willing to use different formulations of this toner.

Of Hybrid Workflow

Kodak’s PRINERGY workflow has been around for many years now and new versions are coming to the market. “I see PRINERGY as our crown jewel. It has the highest approval rating in graphic arts industry around the world. PRINERGY offers a single path to the offset and digital printing. It can improve production and quality of printed products while reducing the overall cost. PRINERGY also helps newspapers to reduce the amount of inks and consumables. We have newspaper customers in Japan that save up to 15% in ink consumption thanks to PRINERGY. However, I do believe we have to increase our effort to market it. The version 6.2 of the software has been recently launched and we are working on the version 7, which is a whole new generation. We are working to enhance PRINERGY so it can work as a central system for printing companies,” explains Lebegue.

My Job Is Done!

Kodak was founded by George Eastman, American visionary and philanthropist. He killed himself in 1932 while the company he founded was on top of its game. That year Kodak was enjoying record sales and the name Kodak had successfully become a household name.  Before killing himself George took out a paper and pen and wrote a note, which read:

To my friends,
My work is done.
Why wait?

Then, he took a pistol out from his nightstand and shot himself in the heart, ending his life at the age of 74. Prior to his death, George Eastman was suffering from a debilitating and painful illness and many believe his suicide was direct result of his illness. However, many also believe his death could not have come at a better moment. The company he founded and his inventions changed the world mostly for the better. Personally, I see Eastman’s suicide as a strong metaphor that sealed the faith of one of the icons of modern technology. At the time of his death he felt his job is done so why wait and suffer more. But Kodak as a company moved on and introduced many new technologies. However, Kodak also invented digital photography for the first time but failed to see the potential of the digital camera, and paid dearly for the mistake. Today, Kodak is a different company, leaner, with a clear vision for the future. It seems that they have finally broken off with the past. Now they have come to realize that their work is not done. It has just started.

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