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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
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