From Film to Pharma: A Masterclass in Industrial Pivoting
When someone says the name “Kodak,” it’s human nature to think of cameras. Founded in 1888, Kodak is one of the oldest domestic manufacturers in the country — and for a century, it was synonymous with cameras and film. These days, digital has taken over, forcing Kodak and other traditional camera and film manufacturers to reevaluate their business model.
Instead of joining the digital revolution, however, Kodak and other giants like Fujifilm have used the opportunity to pivot. It may not be long before these companies become equally synonymous with pharmaceutical manufacturing.
A hop, skip, and a jump to pharmaceuticals
The shift from camera and film production to pharmaceutical manufacturing seems like a giant one on the surface. Looking closer, however, there’s less of a gap between the two than most people realize.
Film manufacturing is a complex chemical process that lends itself to materials handling practices common in the pharmaceutical industry. Moreover, Kodak spun off a chemical division in the mid-1990s: Eastman Chemical (of Eastman-Kodak). While that entity is a standalone company today, it serves as a proof of concept that Kodak can, at the very least, pivot to chemical manufacturing.
Film company Fujifilm is in a similar position. The company is opening a chemical manufacturing plant in North Carolina, moving away from the film business and into a pharmaceuticals space. Beyond just participating in chemical manufacturing, Fujifilm is aiming for leadership. According to CEO Martin Meeson, the plant will be “the largest end-to-end cell culture CDMO facility in North America when finished.”
How will new market entrants fare?
Although no strangers to manufacturing, Kodak and Fujifilm are new players in the pharmaceutical sector. More than that, they’re entering a much bigger market that’s dominated by seasoned players and a diverse array of producers. The question is, how will these companies make a pivot of this magnitude work? The answer comes in the form of government assistance.
Kodak received a $765 million government loan through the Defense Production Act (DPA) to help support the production of essential chemicals for the COVID-19 vaccine rollout. While there’s currently an ongoing investigation into the efficacy of this loan, it nonetheless represents the government’s willingness to help bolster established manufacturers willing to create new jobs on U.S. soil.
Fujifilm also has welcomed assistance during its pivot. North Carolina has agreed to reimburse the company $19.7 million over 12 years as a bid to bring jobs to the state. The state also offered a $2 million grant to help spur the plant’s development.
A pivot takes time, commitment
While there’s funding and capability behind these pivots, both Kodak and Fujifilm need to work hard to establish themselves in new markets. The pivot from film to pharmaceuticals means reinventing the wheel for these companies — finding new customers, forging new partnerships, and building out new supply chains. It’s likely to be years before either company establishes its new reputation. But that’s the nature of a pivot: a commitment to the long-term stability of the business.
For companies coming from an industry that’s ceasing to exist, it doesn’t matter how long the upswing takes — the alternative is dissolving with the consumer camera and film market.