Eastman Kodak is preparing to move all of its medical imaging film production from Shantou in South China's Guangdong Province to its Xiamen branch located in Fujian and transfer its current product lines in Shantou to Lucky, China's largest film maker, to meet requirements in a previously signed cooperation agreement.

According to the US$100 million, 20-year agreement inked between the two companies in late October last year, Kodak paid US$45 million for 13 percent of Lucky Film Co Ltd's stock, making itself the second largest shareholder of Lucky, and will gain another 7 percent share by contributing and upgrading product lines and technologies for Lucky.

Therefore, Kodak will finish its business in Shantou that it has operated for more than six years and move its medical X-ray film production from Shantou to Xiamen, said John Markin, vice-president of Kodak Greater Asia Region and general manager of Kodak (China) Co's Xiamen Branch.

Meanwhile, Kodak now has been upgrading and rebuilding its original medical film product lines in its Shantou factory. There Kodak produced the largest amount of medical imaging products in the Chinese market to make Lucky eligible later to produce world-class traditional and digital photography paper, after Lucky took over factories as well as Kodak's industrial land, coating lines and other facilities in Shantou.

Lucky has started purchasing and installing new facilities for its product lines. Lucky is expected to have the lines on trial production in the second quarter next year, said officials from Lucky Film Co's Shantou Branch, according to recent media reports.

All the transferring of the lines is going smoothly, Markin said.

Markin told China Daily that Kodak is also bringing in advanced emulsion technology to Xiamen to make complex film and paper emulsions for its expanding film production in Xiamen.

He said the new X-ray film facilities, plus the emulsions production in Xiamen, will cost Kodak US$40 million, which would further enlarge product varieties and market share of the Xiamen branch.

He said Kodak is building a 10,000-square-metre addition to the current buildings of its product base situated in Xiamen Haicang Investment Zone. The new factories will start operation next April and all will be completed next June.

"Because of our great performance in Xiamen, we are moving more and more production here," said Markin.

Kodak has spent about 65 percent of its overall investment in China in Xiamen, Maikin revealed.

Established in 1998, Kodak's Xiamen branch has become the largest production base of imaging materials in Asia and the world's largest one-time-use camera maker.

According to statistics from the branch, the base is currently able to produce 190 million rolls of film and 90 million square meters printing paper every year. Its products are mainly exported to the Asia-Pacific area, Europe and the United States.

(China Daily December 20, 2004)