SHANGHAI: Eastman Kodak Company, the world's largest photography firm, will shift the manufacture of its consumer digital cameras, including from its Shanghai unit, to Flextronics International Ltd as part of a cost-cutting strategy.

The agreement was sealed on Tuesday following Kodak's seventh straight quarterly loss and a cut to its full-year revenue forecast, as the company finds the move into digital cameras to be more challenging than expected.

Flextronics is an electronics manufacturing services provider based in Singapore.

Under the agreement, Flextronics will take over Kodak Electronics Products Shanghai Co Ltd and the Kodak Product Centre Japan Ltd in Chino and Yokohama, Japan. Flextronics will also manage the operations and logistics service for Kodak's consumer digital cameras.

"This is another move in Kodak's overall strategy to further drive improvement for profitability and efficiency in the operating model of our consumer digital business," said John Blake Jr, general manager of Kodak's Consumer Digital Imaging Group.

Tian Geng, spokesman for Kodak (China) Co Ltd, told China Daily yesterday that the shift does not mean Kodak will quit the consumer digital camera business. He said it would bring greater flexibility and cost efficiency to strengthen Kodak's leadership in the market.

"We still maintain the design and development functions," said Tian. "We will strengthen our efforts on the advanced design and technical solutions in the field.

"We will launch new models much quicker in the future, at a lower price."

The manufacturing shift will see 550 jobs moved to Flextronics, including around 200 employees from its Shanghai plant.
Tian said Kodak has no plan to cut jobs in China during the shift to Flextronics, but a job cull is beginning to take shape as a result of its losses.

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