Kodak to Stop Making Black-and-White Paper

ROCHESTER, N.Y. – Ending a century-old tradition, Eastman Kodak Co. (EK) will soon stop making black-and-white photographic paper, a niche product for fine-art photographers and hobbyists that is rapidly being supplanted by digital-imaging systems.

Kodak said Wednesday it will discontinue production of the paper, specially designed for black-and-white film, at the end of this year. But the world's biggest film manufacturer will continue to make black-and-white film and chemicals for processing.

"It's a shame to see it go," said Bill Schiffner, editor of Imaging Business magazine in Melville, N.Y. "Digital has done a lot of good things for the industry but it's done some bad things too. It's making a lot of these processes obsolete."

The paper is manufactured at a plant in Brazil. Kodak declined to specify how many employees would be affected by the production shutdown, which is part of a three-year overhaul to eliminate 12,000 to 15,000 jobs by 2007 and shrink the company's work force to around 50,000.

As the industry shifts rapidly from chemical-based to digital imaging, demand for black-and-white paper is declining about 25 percent annually, Kodak spokesman David Lanzillo said.

John Eoff, owner of Photo-Lab Inc., said his 91-year-old shop in Schenectady, N.Y., still sells "a fair amount" of black-and-white paper to photography students and enthusiasts, while professional photographers have mostly gone to digital printing systems already.

"What we assumed was going to happen is the traditional black-and-white paper processing was going to remain more an art form than a commodity," Eoff said. Other companies, led by Ilford Imaging (search) of Britain, still make paper and there will be demand for it, he predicted.

In April, Kodak posted a first-quarter loss of $142 million, citing a steady slide in revenues from film and other chemical-based businesses and higher-than-expected costs to cover job cuts. This month, it replaced its chief executive, Dan Carp, with Antonio Perez, who a few years ago oversaw the rapid growth of Hewlett-Packard Co.'s (HPQ) digital imaging business.

Kodak grew into an icon on the strength of its traditional film, paper and photofinishing businesses. It is now betting its future in digital terrain — from cameras, inkjet paper and online photofinishing to photo kiosks and minilabs, X-ray systems and commercial printers.

Ilford, the largest maker of black-and-white photo paper, went into bankruptcy last year, emerging this year after a management-led buyout. Germany's AgfaPhoto GmbH (search) filed for bankruptcy last month.

Kodak's exit from the business "doesn't surprise me" because many portrait and wedding photographers "are switching over to digital," said Christopher Chute, an analyst with market research firm IDC in Framingham, Mass.

"If I'm printing digital photos on any kind of printer, whether it's inkjet or thermal transfer or dye sublimation, the kind of paper I use is color agnostic," he said. "I can print black and white with great gray gradients and use the same system to print regular color. There's much more versatility with today's print solutions."

"More photographers and consumers that shoot black-and-white are shooting digital, they're processing it on regular inkjet paper, and ... the quality is pretty good," Schiffner said.