*NEWS* AGFA TO SPLIT INTO 3 UNITS

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*NEWS* AGFA TO SPLIT INTO 3 UNITS

 user 2006-06-26 at 10:57:00 am Views: 48
  • #15858

    Belgian imaging firm Agfa Gevaert to split into 3 units
    The
    Belgian imaging technology company Agfa Gevaert has said it is
    splitting into three independent businesses — graphics, healthcare and
    materials — to save money.Agfa-Gevaert, which has roots going back
    nearly 140 years, said that it would operate as the holding company for
    the three units.Although a savings strategy would not be presented
    until August, the company said it expected to economize about 250
    million euros (315 million dollars) annually by 2008 from splitting
    up.”This structure 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,” the group said in a
    statement.Chief executive Marc Olivie said: “Creating three independent
    businesses with a streamlined cost structure will give each group the
    best opportunity and the necessary means to strengthen its leading
    position in its respective markets.”Investors welcomed the decision and
    shares in the company surged 7.13 percent to 18.78 euros in early
    afternoon trading while the Bel-20 index of leading Belgian shares was
    showing a gain of 1.06 percent at 3,599.03 points.KBC Securities
    analyst Dirk Saelens said: “While the social impact from this
    restructuring is very negative, from a financial point of view, the
    company needs to take such drastic measures in order to safeguard
    future profitability.”A spokesman said it was too early to tell whether
    the split would lead to job cuts or relocations.The split will create a
    new business called ‘materials’, which will group film manufacturing
    activities with the niche speciality products. It will be positioned as
    an independent supplier of film and related products, the group
    said.Meanwhile, the graphics and healthcare units have both been
    already operating independently since the start of the year.The
    “appropriate structure” for each unit will be defined by early 2007,
    Agfa-Gevaert said.By division, the group said graphics aimed to be a
    1.9-billion-euro business by 2008.The unit would expand in industrial
    inkjet and emerging markets. It would also invest in innovative
    technologies in inkjet, digital pre-press, software and services.The
    group hopes the healthcare unit to achieve at least 1.7 billion euros
    by 2008. Agfa said the unit will continue to invest in the
    international roll-out of its hospital IT services.For materials, the
    group said it would be a 700-million-euro business. It would become a
    “low-cost producer” of primarily film and related products.The unit
    would also develop, produce and sell film-based products to industrial
    markets outside the printing and healthcare sector, such as the printed
    circuit board industry, aerial photography, movie film and identity and
    security, Agfa said.It added that the expected decline in some of the
    traditional film products would be compensated through the growth in
    new applications