CEO's facelift for Fujifilm includes cosmetics business

Few people may see a connection between film photography and skincare, but to Fujifilm chairman and chief executive Shigetaka Komori, moving into cosmetics was a natural progression for the company. He says the human skin, much like photographs, tend
Few people may see a connection between film photography and skincare, but to Fujifilm chairman and chief executive Shigetaka Komori, moving into cosmetics was a natural progression for the company. He says the human skin, much like photographs, tends to deteriorate with age as a result of exposure to ultraviolet rays.PHOTO: AZMI ATHNI FOR THE STRAITS TIMES

He made bold changes to pull firm out of crisis when demand for film photography faded

An unwavering sense of duty-that is what drives Fujifilm Holdings chairman and chief executive Shigetaka Komori at work every day for over five decades.

Mr Komori, now 78, wrote in a book a few years back: "The notion of working devotedly for your company or fighting loyally for your country may not be very popular in Japan these days, but I still believe it is only natural to love your company, your country, your family and your friends.

"It is this sense of noble duty that provides the impetus for people to grow."

And it was indeed this very sense of duty that helped Mr Komori lead Fujifilm out of a crisis - during the early 2000s, when the group's analogue film business crashed with the coming of the digital era.

"In 1999, we were the market leader in digital camera sales," Mr Komori told The Straits Times in an interview last month, noting that Fujifilm had, in fact, launched the world's first fully digital camera back in 1988.

"But with digitalisation, the digital camera rapidly swept the world. This happened very quickly and was something we didn't expect at that time," he recalled.

"Many players started entering the digital camera market, including electronics makers like Sony and Panasonic, and then it became an all-out war," said Mr Komori, noting that competition then had become so fierce that the company cut prices each year by a hefty 20 to 30 per cent.

KEEPING UP WITH CHANGES

Society is changing very rapidly with technology, and the company must adjust to that. Being able to continue making a change in society. That's innovation.

MR SHIGETAKA KOMORI, Fujifilm Holdings chairman and chief executive, on why a good company must keep providing better products and services.

In 2000, the photography business as a whole made up two-thirds of Fujifilm's overall profits. But intense competition quickly dragged this business segment into the red in the next five years.

"At that time, we were no longer able to compensate the loss of our photographic film business with the sales of digital cameras as our market share in digital cameras started to drop. It was then that I really felt we were facing a crisis.

"I knew I had to be bold," said Mr Komori, who was president and chief executive in 2003.

"At that time, I had reached the peak of my career, but I was faced with this crisis.

"So I saw it as my mission to rebuild the company and secure its future. A second foundation. I knew I could not afford to fail - I had to succeed."

Under his leadership, Fujifilm took major, even painful, steps with a 200 billion yen restructuring effort that included downsizing its photographic film division and cutting costs.

At the same time, the company focused on new growth strategies and moved into new businesses.

One area it entered decisively was healthcare and cosmetics.

Few people can see a connection between film photography and skincare, but to Mr Komori, the move was a natural progression.

"I had already thought about going into the cosmetics business for a long time," he said.

This was after coming to a realisation that the human skin - much like photographs - tends to deteriorate with age as a result of active oxidation caused by exposure to ultraviolet rays. "It's the same with photos. You put them up on the wall, and slowly, as time goes by, they start to fade," he noted.

Fujifilm's skincare brand, Astalift, launched in 2007, taps its own film photography expertise and uses anti-oxidation methods to counter the deterioration of the skin.

"We put a very strong anti-oxidation ingredient into our photographic products in order to stop the colour from fading as time goes by, and we decided to do this for our skincare products too," said Mr Komori, pointing to the natural pigment known as astaxanthin, which has now become a mainstay in Astalift products.

The group also uses its nanotechnology solutions - used to manipulate certain compounds into extremely fine particles in order to enhance the resolution of photographs - on astaxanthin, which is not soluble in water. This allows the substance to be easily absorbed by the skin, explained Mr Komori.

Today, the cosmetics business makes up just a fraction of Fujifilm's overall revenue, which came up to 2.3 trillion yen (S$27.8 billion) last year.

But Mr Komori is confident that it remains one of the biggest growth areas for the company, which now thrives on a more diversified business portfolio.

And there is still much more to be done, he added.

"In the global cosmetics market, you have major brands like L'Oreal and Shiseido putting a lot of money in advertising, and they have been building their brands for a long time.

"We are a newcomer in the cosmetics field, so it's not so easy for us to catch up. The journey - to capture women's hearts - is far from over," he said, with a laugh.

Fujifilm aims to spend 500 billion yen in strategic acquisitions in the next three years, including those in healthcare, as it continues to expand outside of the photographic film business.

As a leader, Mr Komori, who has been with Fujifilm for 55 years, believes it is critical to be brave.

"You have to be brave to carry out changes. You shouldn't be scared by problems, and you shouldn't fear danger."

Having been able to bring Fujifilm back from the brink of collapse - a fate that its then biggest rival, Kodak, had been unable to avoid - has only entrenched his belief that constant innovation is key for the company.

A good company, Mr Komori believes, is defined as one that is able to utilise its resources fully and contribute to society with its goods and services.

A firm should also re-invest money that comes from selling these products or services into creating further value that can continually be returned to society.

"A good company has to keep on providing better products and better services. That is why we need innovation," he said.

"Society is changing very rapidly with technology, and the company must adjust to that. Being able to continue making a change in society. That's innovation."

The Fujifilm that Mr Komori envisions in five or 10 years' time is quite simply "a bigger, better company".

Pointing to the younger members of its management team, he said: "They are the ones who are going to drive the company.

"I set the foundation, but they are the ones to take the company to an even higher level."

A version of this article appeared in the print edition of The Straits Times on November 20, 2017, with the headline 'CEO's facelift for Fujifilm includes cosmetics business'. Print Edition | Subscribe