Company history

Fujifilm was born of a national anxiety. In the 1930s Japan bought its photographic film from America’s Kodak and Germany’s Agfa, and depending on imports for a material with military as well as economic uses was treated as a strategic weakness. Dai Nippon Celluloid, which made the film base, spent some fifteen years preparing to produce film domestically and completed a plant at Ashigara in Kanagawa in January 1934. Fuji Photo Film was spun off to take the whole of it over — ¥3 million in capital, 340 employees — and with it Japan achieved, for the first time, integrated production running from film base all the way to the finished product.

The start was very nearly the end. Silver-halide film demands delicate emulsion design and precise coating, and it is not a field a newcomer masters quickly: mass production failed in 1936 and left an accumulated loss of ¥360,000, enough to put the company’s survival in doubt. Setsutaro Kobayashi, later its president, recalled the appeal he made inside the company — that they had staked everything on domestic film with a state subsidy amounting to forty per cent of capital, that their mission was to drive out the foreign product, and that anyone who wished to leave should feel free to go.

What saw the company through was time bought behind a protected market. A new Odawara plant in 1938 rebuilt production and stabilised quality, and in 1946 FujiColor Service and a four-agent distribution network stretched a sales-and-developing web across eastern and western Japan. The two cultures hardened in these years — chemical control of emulsions, and the quality control of precision manufacturing — became a technological asset that would one day reach far beyond film, into semiconductor photoresists, optical films for displays, and the manufacture of biopharmaceuticals.

Fuji diversified, but stayed close to imaging. In 1962 it formed Fuji Xerox, a joint venture with Britain’s Rank Xerox, to enter copiers, and in 1965 it launched the N100 colour film. Yet as colour-film demand surged, a quality gap between domestic and foreign product persisted, and the pressure from abroad was real. In late 1968 MITI moved to liberalise colour-film imports; a year later, bracing for Kodak price cuts, one industry figure told the Yomiuri that if Kodak attacked the Japanese market in earnest, domestic makers would be swept away ‘like Coca-Cola or Nescafé.’

Fuji answered the threat with technology rather than price protection. In February 1977 it released the ISO 400 ultra-high-speed colour film Fujicolor F-II 400 — a 36-exposure roll at $4 (¥950), undercutting the roughly $5 (¥1,200) of imported film. The executive board had approved development in unusual terms: build it with all our strength, spend what you like, throw in every person you can gather. In 1981 the FCR X-ray system began Fujifilm’s store of digital medical-imaging know-how, and by 1985 Fuji held more than seventy per cent of the domestic film market, with Konishiroku under twenty and Kodak a distant third.

From F-II 400 onward, Fuji dominated colour film and turned into an extraordinarily profitable company, earning over $419.2M (¥100bn) of ordinary profit a year on the film business alone, even as it built out overseas. It was that very success that made the danger easy to defer. In November 1997 Nikkei Business marked the turning point: digital cameras were spreading just as the domestic film-and-paper market that generated the profit began to shrink. The year to March 2000 brought a fall in revenue — the first sign, in the consolidated numbers, that the ground under the core business was giving way.

Shigetaka Komori took the top job as the core business was disappearing and named the moment a ‘second founding.’ He rebuilt the group around it: Fuji Xerox was brought from equity-method into a consolidated subsidiary in 2001, FUJIFILM Kyushu was set up in 2005 for high-functional materials, and in October 2006 the group shifted to a holding-company structure and renamed itself Fujifilm Holdings. Under the VISION75 restructuring he accepted the shrinkage of the founding business and cut on the order of five thousand jobs — recasting the technology of vanishing photographic film not as an asset to discard but as one to redeploy, into liquid-crystal materials and healthcare. Kodak, facing the same market’s death, went bankrupt; Fuji survived.

The boldest move was into medicine. In 2008 Fuji bought Toyama Chemical outright and entered pharmaceuticals in earnest — a rare cross-industry leap, a film maker acquiring a drugmaker, that widened its medical business from diagnosis into treatment. Toyama’s antiviral T-705 won conditional approval in 2014 and was adopted, as Avigan, into the government’s pandemic-influenza stockpile. With that, the company’s self-definition began to move from a silver-halide film maker toward a healthcare business.

It then built the medical franchise by buying rather than building. In 2011 Fuji acquired Merck’s biopharmaceutical contract-manufacturing operation for about $501.4M (¥40bn), entering bio-CDMO by taking over a running GMP plant rather than starting from scratch — and deliberately staying a contractor, so as not to compete with the pharmaceutical companies that were its customers. In 2012 it added the ultrasound maker SonoSite and consolidated endoscopy, diagnostic imaging and ultrasound into its medical arm; a 2016 bid for Toshiba Medical failed. The film-era chemistry of coating and mass production ran naturally into the culture and purification of biopharmaceuticals.

The document business forced the next reckoning. In March 2018 Fujifilm announced a plan to buy Xerox — about $6.1B (¥670bn) for 50.1 per cent — and merge the Japanese and American copier businesses into one. But Xerox’s large shareholder Carl Icahn and others fought the terms, a court injunction blocked it, and in May 2018 Xerox unilaterally cancelled the deal. Two months from announcement to collapse: a sharp lesson in the difficulty of cross-border M&A and in how far a single large shareholder can overturn the terms.

Fujifilm answered the failure with a second-best move. In 2019 it dissolved the half-century joint venture and took Fuji Xerox as a wholly owned subsidiary, putting the document business fully under its own control, and in 2021 renamed it Fujifilm Business Innovation — ending the copier partnership begun with Xerox in 1962. What it could not buy was the Xerox parent; what it secured for certain was undivided command of the business it had once shared, and the standing to fly its own brand.

Meanwhile it completed the healthcare edifice. In 2019 it bought Biogen’s Danish manufacturing subsidiary for about $890 million, lifting CDMO culture capacity toward 150,000 litres, and in December 2019 it acquired Hitachi’s diagnostic-imaging business for about $1.6B (¥179bn), gaining MRI, CT and ultrasound lines. Pharmaceuticals, contract manufacturing and devices now stood side by side, and the group’s self-image had become that of a comprehensive healthcare company. In 2021 the top job passed from Komori, after more than twenty years, to Teiichi Goto, who set healthcare — aimed at ¥1 trillion in revenue — as the pillar of future growth. The composite technology company shaped out of film’s death was handed on.