Fuji Photo Film Proceeds with Reorganization of Domestic Production System The Ashigara and Odawara Manufacturing Factory Structures will be Incorporated into a new "Kanagawa Factory", Enhancing Cost Competitiveness of Photosensitive Material Production and Substantiating the FPD Material Production System.

September 1, 2005

In order to create a highly efficient and competitive production system which responds to the changes in the company's business structure, Fuji Photo Film Co., Ltd., (hereinafter "Fujifilm"; President and CEO: Shigetaka Komori) will unify the functions of the Ashigara and Odawara factories, production locations for photosensitive materials (hereinafter "sensitive materials") and flat panel display (hereinafter "FPD") materials. The new "Fujifilm Kanagawa Factory" will begin unified operations as of October 1, 2005. Furthermore, the current sensitive materials processing lines at the Ashigara Factory will be simultaneously transferred in its entirety to a subsidiary production company, F.P.M. CO., LTD. (President and CEO: Yoji Sekihara), to further streamline the production system.

Fujifilm has established its VISION 75 medium-term management plan, setting it on a path of further growth while implementing new business strategies and promoting structural reforms. These steps have been taken to respond to the changing business environment, which has arisen from the advance of digitization and the decrease in demand for color film.

The company has been reviewing and conducting structural reforms of systems while pursuing efficiency in all processes, ranging from research and development, procurement, production and sales to distribution. As part of the structural reforms for production, the decision was made to conduct a reorganization spanning multiple manufacturing plants in order to establish a production system that is more streamlined and cost competitive. This will also enhance the production system for FPD material products, the core products driving the growth of the company.

Since its founding, the Ashigara Factory has been integrating production, ranging from the manufacture of base materials and emulsions for sensitive materials such as color films and photographic papers, to their application and processing. It has also been developing and producing "FUJITAC", a protective film for polarizing plates, an FPD material whose business continues to expand. The Odawara Factory has been producing raw materials for sensitive materials, such as silver nitrates and couplers, in addition to developing chemicals. The factory has also been synthesizing new raw materials, as well as their application and processes to produce materials that are essential to FPD production, such as "WV film", developed by further improving the functionality of "FUJITAC" and which greatly widens the viewing angles of LCD panels, as well as the antireflective "CV film" for the surfaces of LCD panels. Organizational reforms and strategies to improve efficiency have been promoted at these respective manufacturing plants in the past, and such efforts will now be raised to a new level by the implementation of this new production reorganization.

The newly formed Kanagawa Factory will become the core of the trilateral global production of sensitive materials conducted in Japan, the Netherlands and the United States. The factory will assume a controlling role and construct an optimum system, responsive to changes in the demand for sensitive materials. Following the complete transfer of the processing lines to a subsidiary company, there will be further streamlining in the future. This streamlining will contribute to a production system capable of offering products with reliable quality at moderate prices and ensuring profit, even in the face of fluctuating production volume. It is hoped that this will lead to an increase in the company's market share of sensitive materials worldwide, through which the company aims to further increase its profits.

Furthermore, the organizations of the two plants will be unified and operations integrated under the management of the new plant. This will be conducted in order to streamline and modify the system into one that is more dynamic and capable of flexible distribution of critical resources. Some engineers and operators who have been involved with the sensitive materials will be transfered to develop and produce FPD materials in order to accelerate the development of new products. Production management for FPD materials at the Ashigara and Odawara factories along with those of the production subsidiary companies FUJIFILM Opt Materials Co., Ltd. (President and CEO: Goro Uehara), already in operation in Shizuoka Prefecture, and FUJIFILM Kyushu Co., Ltd. (President and CEO: Mitsuo Yamaguchi), currently being constructed in Kumamoto Prefecture, will be unified at the new plant to respond swiftly to increasing production volume and respond in a timely manner to customer needs.

This reorganization of production at domestic manufacturing plants will be part of the organizational reforms implemented in production systems globally. Further reviews will be conducted in the future to improve profitability by enhancing cost competitiveness.

Media Contact:
Fuji Photo Film Co., Ltd.
Corporate Communications Division, Public Relations Division
Tel: 81-3-3406-2490
Fujifilm website:
Japanese :http://fujifilm.jp/
English :http://www.fujifilm.com/