Fujifilm as a company is most widely associated with photography, but the pandemic and the weakening of the photo industry as a whole have changed that. Imaging solutions now represent just 13% of company revenue, and the new CEO is investing heavily in pharmaceuticals as the brand continues to pivot.
The company’s former CEO, Shigetaka Komori, is credited with saving the company in the mid-2000s, which pushed the film company into digital technologies and prevented Fujifilm from descending into bankruptcy – the story is contrasted by compared to the stumbles of Eastman Kodak. The company’s new CEO, Teiichi Goto, took over as CEO of Fujifilm Corporation on June 29 and since then the company has made its pivot to healthcare evident through two major financial decisions.
On the same day, Fujifilm announced that it would invest $850 million in its Diosynth Biotechnologies division to increase manufacturing capacity for biologics, including recombinant COVID-19 vaccines and advanced gene therapies in the United States and the United States. UK. A few days later, the company announced plans to close four major US-based photographic equipment factories in Greenwood, South Carolina. The move would also cut 400 jobs and consolidate manufacturing into a single plant.
According to Reuters, Goto announced today that he is leading an additional three-year, $11 billion investment plan in healthcare to shore up pharmaceutical production as the world’s largest revenue and profit center. company and continue to diversify outside of its photography business.
“Businesses like healthcare are like a deep blue ocean,” Goto told Reuters. “It’s not going anywhere.”
Goto aims to provide other drugmakers with what is known as a contract development and manufacturing organization (CDMO) and reduce the “scale of risk” involved in full drug development. Revenue for this division exceeded $906 million last year, nearly double the previous year. Goto says he expects it to double again by 2024. Overall, the shift to healthcare is designed to help the company reach $260 billion in operating profit. yen by fiscal year 2023. Healthcare is expected to account for 103 billion yen of that total, which would make it the largest segment of Fujifilm’s holdings, and bypasses both materials and imaging.
In an interview with asahi, Goto said that despite the company’s majority pivot away from the camera industry, he would not seek to divest or sell it. Because the company has decades of experience in photochemistry and lamination technology – and is still profitable – the film will remain a major player in the brand’s assets. However, there was no mention of additional investment in imaging, and with such focus on healthcare from Fujifilm, it’s unclear how important imaging is to the long-term strategy. of the company.
As reported by Bloomberg, the pivot to healthcare and semiconductors has been a major factor in Fujifilm’s finances over the past year amid the Covid pandemic, which has exploded for the company. Meanwhile, the photography and digital imaging industries were floundering.
“Healthcare and semiconductor materials will be our future earnings drivers,” Goto told reporters.