Agfa-Gevaert splits into three

Jun 29, 2006 5:06 PM

Agfa-Gevaert (Mortsel, Belgium) has decided to split into three independent businesses: Graphics, HealthCare and Materials. The Materials business will group all of the film manufacturing activities with Specialty Products and will be positioned as an independent supplier of film and related products. This structure is meant to give each business the maximum flexibility to implement its growth strategy and to further reduce costs in line with rapidly changing market circumstances. Agfa-Gevaert intends to achieve annual cost savings of an estimated 250 million Euro by 2008, primarily in general services and in traditional products across all business groups and regions.

This transformation was the result of a strategy to combine investments and acquisitions in new growth areas (such as industrial inkjet and healthcare IT) with divestitures of non-core activities (such as NDT and Consumer Imaging). Since the beginning of 2006, the business groups Graphics and HealthCare have been operationally independent.

The appropriate structure for each business group will be defined by early 2007. Agfa-Gevaert NV will operate as the holding company for the three independent businesses.

Agfa intends to reduce worldwide costs annually by 250 million Euro, by 2008, primarily in general services and in development, production and distribution of the traditional products across the three business groups.

Agfa Graphics aims to be a 1.9 billion Euro business by 2008.

Agfa Materials will focus on being a low cost producer of primarily film and related products on an exclusive basis for Agfa Graphics and Agfa HealthCare as well as for third parties. Materials will also 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. On a standalone basis, including the sales to Graphics and HealthCare, Materials is expected to be a 700 million Euro group.

"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,” says Marc Olivié, President and CEO of Agfa-Gevaert. “This plan is in the best interest of our customers, employees and shareholders.”

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