Under the agreement announced yesterday, store owners who borrowed money from the bank to buy imaging equipment can choose to defer their mortgage principal repayment for three months. Kodak will cover the interest payments during the period.

"This arrangement will help ease the cash-flow burden on Kodak Express stores that was caused by the SARS outbreak," said Jacky Chan, general manager of Kodak China's consumer imaging operation.

"The program will help dealers recover from the downturn and get prepared for the market rebound, which is expected during the National Day holiday in early October."

The company said it will also introduce a similar program in cooperation with the Industrial and Commercial Bank of China's local Branch.

The bank also provides equipment financing for Kodak Express stores in the city.

To date, more than 300 Kodak Express stores have joined the equipment financing programs offered by the US photographic giant and the two banks.

The amount of loans approved exceeded 78 million yuan (US$9.4 million).

The financing program, which offered Kodak Express owners loans of up to 1 million yuan, has accelerated the growth of the stores around the country.

Kodak Express is now the largest branded imaging chain in China, with about 8,600 stores in more than 700 cities.

A total of 1,400 stores under the brand offer digital output services.

Kodak Express, which was introduced to China in 1994, is a worldwide program to help independent entrepreneurs set up and operate standardized imaging service stores.

Travel-related industries, such as aviation, hotel, dining and retail, have been hit hard by SARS over the past few months. The imaging industry is no exception as people traveled less and took fewer photos.

The world's biggest photography company warned last week that the SARS outbreak in Asia will halve its operating profits in the second quarter.

Kodak reported lower-than-expected sales of film and photographic paper in Asia.

The company's sales of film in China in April and May were only about half of the amount sold in the same period a year earlier.

(eastday.com June 26, 2003)