Fujifilm Exiting Business Innovation?

Fujifilm has announced its intention to spin off its Business Innovation unit. This announcement by Fujifilm is a clear message that print industry OEMs are finally addressing the industry’s reality. There must be consolidation, and some will, in fact, exit!

I recently shared thoughts on my daily YouTube series, The End Of The Day With Ray, about the Fujifilm Business Innovation Spinning Off Announcement. So, this article piggybacks off that episode.

In the Fujifilm announcement, they suggested the possibility of an IPO and holding a 20% equity stake in the spin-off. This seems like an unrealistic strategy. In the year 2026, a new publicly traded print business isn’t going to attract stock market investors.

Instead of an IPO, a more strategic approach involves industry consolidation:

• Manufacturing Transfer: Fujifilm should transfer its manufacturing component to ETRIA, the Ricoh Manufacturing Consolidation business that involves Toshiba Tech, OKI, and Ricoh. Currently, Ricoh’s equity position is 80.74%. Fujifilm would bring significant capacity to ETRIA, and RICOH could offload 30% of its equity to Fujifilm while still maintaining a controlling interest. This would give Fujifilm an income stream as an equity holder without the burdens and distractions of managing a print business.
• Distribution Alignment: Regarding the Fujifilm street-level customer base. Fujifilm could sell that to Ricoh. Ricoh could absorb the Fujifilm customer base nicely into its global direct and dealer footprint. Both Fujifilm and RICOH have similar non-print service deliverables; the two organizations are sufficiently similar, causing little disruption to the print or digital services end users.

Fujifilm is not a recognized name in business printing, as Fujifilm relied on Xerox to deliver the manufactured devices to end-users with the Xerox label. Fujifilm’s brand name in print equipment is vastly different from what it was in its film business. When Fujifilm exited the analog film business, the Fujifilm name carried weight. However, for the most part, businesses today do not even know that Fujifilm is an MFP or production print equipment manufacturer. Most of their distribution to end-users is rebadged product.

When Xerox and Fujifilm dissolved the joint venture in the ANZ, the marketplace quickly realized that end-users knew and recognized the Xerox brand way above the Fujifilm branding,

If the print industry were honest, it would conclude that the Fujifilm brand could literally disappear from the print industry without affecting end users. Especially in the business and production print space.

When Fujifilm and Xerox had their falling out and dissolved their joint venture, Fujifilm was naive to think it could build a successful global end-user distribution platform to mirror what Xerox had built over decades.

I was very vocal in my suggestions that Fujifilm needed to reevaluate its realities. It made zero sense to me for Fujifilm to sever Xerox’s global end-user distribution and try to replace it. Xerox is the largest print services dealer in the world. That fact makes Xerox powerful to any OEM wanting to expand street-level distribution.

Fujifilm has attempted to build street-level distribution since the Xerox breakup, and based on what I have witnessed in the U.S. marketplace, recruiting and securing dealer distribution for the A4/A3 MFP and production print business has been very disappointing.

Fujifilm has mastered the production print space as a world-class OEM. Xerox rebadges and sells Fujifilm production equipment; Sharp has been selling rebadged Fujifilm production as well.

Fujifilm, in my thinking, does not understand how to build and manage its own end-user dealer distribution. Fujifilm executives seem to view street-level distribution through the lens of production and industrial print. This misaligned approach has resulted in what I see as one of the major components of their failed attempt to replace Xerox’s end-user distribution.

Over the last few years, I have shared this caution with Fujifilm executives both in person and on my daily YouTube show, The End Of The Day With Ray.

So, here we are: Fujifilm has announced plans to spin off Business Innovation. I suggest Fujifilm move quickly, as the print industry marketplace will not be excited by uncertainty from any OEM.

I would also suggest Fujifilm does not confuse its brand value at the end-user level. They have opportunities to divest of Business Innovation. I believe my Ricoh and ETRIA strategy is solid and that Effissimo Capital, which holds over 19% of Ricoh’s equity, would support it.

For those who are questioning why I see Ricoh as the acquirer of Fujifilm Business Innovation rather than Konica Minolta. In short, my previous thoughts on Fujifilm and Konica Minolta coming together were always based on Fujifilm BUYING Konica Minolta. Fujifilm spinning off its print business changes everything in my thinking regarding any relationship with Konica Minolta. The procurement joint venture between Fujifilm and Konica Minolta is not anything that can’t just go away.

The industry must consolidate, and Fujifilm’s announcement endorses that fact!

Fujifilm is an extraordinary business and is building out incredible infrastructure in the biotech and chip materials businesses.

The spinning off of Business Innovation eliminates the “Conglomerate Discount.”

Right now, Fujifilm’s incredible growth in health care and chip materials is being heavily dragged down by its 35% revenue exposure in business printing. Investors hate buying into mixed-bag conglomerates.

So, in my view, slicing out Business Innovation (The Print Business) would re-rate Fujifilm as a pure-play tech/Biotech stock. That could skyrocket its price-to-earnings (P/E) multiple to match modern medical and tech peers.

Fujifilm knew when it was time to exit film, and I believe Fujifilm will exit print, ending another chapter in its history as it focuses on its future in chip materials and Biotech.

*This article is republished from Ray Stasieczko’s LinkedIn with permission.

About the Author

Ray Stasieczko is a forward-thinking and often controversial writer and speaker. You may not want to agree with everything he says, but you are compelled to read and listen. To do otherwise could spell doom.

He has called the imaging channel home for over 30 years, served in various roles, and contributed over 100 articles to the industry’s publications. Ray has also spoken at the RT VIP Imaging Expos in Cairo, South America and China.

• Watch and subscribe to Ray Stasieczko’s industry-leading YouTube channel, “At the End of the Day with Ray.”
• You can contact and watch him on LinkedIn, where he has more than 30,000 followers

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