Agfa Shrinks to Grow

Late last month, Agfa-Gevaert Group, Mortsel, Belgium, revealed a corporate growth and efficiency plan aimed at countering pressures on traditional imaging, i.e., rising competition, dramatic price erosion, consolidation of current technologies, and accelerated transition from analog to digital technology.

In the plan, Agfa means to pursue profitable growth driven by new digital solutions and strengthen its positions in traditional businesses.

As part of its strategy to slash overhead and production costs as well as convert fixed costs into variable costs, the company plans to cut operational costs by about $500 million and working capital by about $450 million by 2003. A one-time estimated restructuring cost of $500 million, said to be equivalent to the reduction of some 4,000 jobs, will be spread over the years 2001-02.

Managers say substantial benefits of the plan are expected to begin in 2003 and reach full impact by 2004.

At present, Agfa bills about $4.8 billion worldwide in the graphic arts, medical imaging, motion-picture film and consumer imaging, and photography. It employs some 22,000 people in 40 countries.

Earlier, the company's U.S. unit, Agfa Corporation, Ridgefield Park, N.J., signed an agreement to acquire Autologic Information International, Inc., Thousand Oaks, Calif., for about $42.5 million. Autologic designs and manufactures electronic prepress systems for the publishing industry, including computer-to-film and computer-to-plate systems.