Agfa Splitting into 3 Independent Businesses

By: E&P Staff Agfa-Gevaert, Mortsel, Belgium, announced it will split into three independent businesses: Graphics, HealthCare and Materials.

Estimating annual savings of 250 million Euro by 2008, primarily in general services and in traditional products across all business groups and regions, Agfa said the change "will give each business the maximum flexibility to implement its growth strategy and to further reduce costs in line with the rapidly changing market circumstances."

Actions to streamline the organizations and realize cost savings will be developed this summer.

The Materials business will group all film manufacturing with the niche products of Specialty Products and will be positioned as an independent maker of film and related products, on an exclusive basis, for Graphics and HealthCare and for third parties.

Agfa's transformation in recent years from an analog imaging-product company to provider of digital-imaging and IT solutions was the result of a strategy combining investments and acquisitions in new growth areas with divestitures of non-core activities. The Graphics and HealthCare groups have been operationally independent since the beginning of 2006.

Each business' structure will be defined by early 2007, and Agfa-Gevaert NV will operate as the holding company for the three businesses. All three are in competitive environments characterized by a decrease in some traditional film markets and steep cost increases of raw materials.

Continuing to offer complete prepress solutions and service, Graphics will expand in industrial inkjet and in emerging markets and will invest in technologies in inkjet, digital prepress, software and services.

HealthCare will continue to invest in the international roll-out of its hospital IT platform.

Besides low-cost production of film and related products, Materials will develop, produce and sell film-based imaging solutions to industrial markets outside the printing and healthcare sector, such as the printed circuit board industry, aerial photography, movie film, and identity and security. The expected decline in some of the traditional film products will be compensated through the growth in new applications.