MirkoBoeddecker
Good news: the insolvency administrator has agreed to a provisional resumption of production.
All existing orders are to be fulfilled.
The downside: from now on, production must be cost-effective :( . So we’ll be receiving order confirmations with increased prices.
Guys, this makes perfect sense!
For those not prepared to pay 10–15% more, we are offering Vario Classic at the old price.
If you would like Polywarmton PE, Baryt or Classicpan and are prepared to pay up to 15% more, please place a pre-order now so that we can plan as effectively as possible. Please let us know your estimated requirements for the next six months.
Mirko
Gast
Hi Mirko,
Does that mean we have to stock up now? Or will there be production to fulfil existing orders as well?
Regards, Sven.
Gast
>>>>>>>>> The downside: production must now be cost-effective.
See, that’s what you get.
zensusa
Hello Mirko,
I have a question about your formulation "put it on hold for now?":
The more precise the customer’s details, the easier it is to plan; I understand that and know it from my own work and planning. But what does that mean for you specifically if, for example, I tell you – and in effect place an order – that over the next six months I need Polywarmton Baryt 24 x 30 cm, matt chamois, at least 300 sheets (6 packs of 50 sheets each). If this type were already produced by Forte by the end of January 2005 and ready to go, does that mean I would receive my total quantity immediately at the end of January/beginning of February and would have to pay for it, or is this quantity held for me on consignment and must therefore only be paid for upon delivery?
Incidentally, as positive as your message is, unfortunately I have switched my roll and sheet film requirements from Classicpan material to Rollei R3 material, as the former was no longer available; the latter is also super-panchromatic and even more versatile than Forte material. Unfortunately, there is a world of difference in price between the two materials – though, to be fair, it must be said that this is justified. The same applies to some larger paper sizes in Classic Art matt/chamois, which I was forced to replace with Oriental Baryt Warmton, matt.
These circumstances will unfortunately jeopardise your long-term planning regarding your actual requirements for paper and film. Because, just like me, anyone who has had to source replacements by now will likely only be able to place correspondingly fewer paper or film orders for the coming months. Consequently, the pre-orders received are likely to reflect only a limited portion of the potential demand; – quite a dilemma you find yourself in.
I do hope, however, that Forte/Classic will once again be fully available in the future.
One more question, which has nothing to do with Forte, but with the partnership with ‘Retro Photographic Ltd.’
Since this company also distributes Kentmere papers, would it be possible for you to include Kentmere papers in your range in future – I’m thinking specifically of ‘Kentmere Art Classic’, a unique paper?
Best regards,
Lo van de Renne
MirkoBoeddecker
Hello Lothar, Sven,
The current production run should last for six months, as the factory will need to be refurbished afterwards.
There is a consortium of investors comprising former Forte customers with whom we are also in negotiations – to ensure the transformation (downsizing of the business) runs as smoothly as possible – and who are prepared to invest and finance the conversion.
Conclusion: Following the conversion, the business will continue under a new name and with new owners – barring any unforeseen circumstances. That is the current state of planning.
You don’t have to take everything in January. We mainly want to know which materials are still required and which, for example, have already been switched over (as with Lothar – by the way, you can of course also purchase Lothar R3 and Oriental from us at professional rates) so that we have invested our limited funds in the right materials afterwards. After all, the entire production has to be pre-financed by us.
So you can either place a firm order (e.g. with a fixed delivery date; then the goods are guaranteed for you) or send a rough requirements plan (then at least we can be sure to factor in this material plus the safety margin correctly).
We hadn’t even thought of PW17, for example. Good thing you mentioned that, Lothar.
Best regards,
Mirko
zensusa
Thanks very much for the prompt reply, Mirko.
I’ll now work out exactly how much paper I need and in what sizes, and then place an order. As I mentioned earlier, I’ve got enough film to last me for the next few months.
Oh, and what’s the situation with Kentmere now, specifically ‘Art Classic’?
Regards, Lo
MirkoBoeddecker
Lothar,
We’ve been in contact with Kentmere for many years.
The current problem is that Kentmere has made a deal with the devil and sold its entire US production exclusively to Free-Dump-Style.
The very company that drove Ilford and Forte into bankruptcy.
So we can’t sell the paper worldwide – not even as ADOX.
It would therefore be an exclusive product for Germany and England, and JandC would be left out in the cold.
That’s why we’re finding it a bit difficult to decide whether to reveal their name....
But the final decision hasn’t been made yet.
Best regards,
Mirko
CarstenM
Hello Mirko,
You write:
"The current problem is that Kentmere has made a deal with the devil and sold its entire US production exclusively to Free-Dump-Style.
The same company that drove Ilford and Forte into bankruptcy.
So we can’t sell the paper worldwide – not even as ADOX.”
How are we to understand this? In particular, what is this ‘Free-Dump-Style’ company all about? Who are they anyway?
I thought the bankruptcies of the respective companies were self-inflicted? How, then, can a US company that distributes a specific brand of paper as it sees fit (that’s how I understand your statement) drive other companies into bankruptcy? Is the Kentmere brand really that dominant in the photographic paper market?
Sorry for all the questions, but I’d appreciate a bit more background information.
Regards
Carsten
Gast
The current problem is that Kentnere has made a deal with the devil and sold its entire US production exclusively to Free-Dump-Style.
[...... and so on ....]
Hi Mirko,
I’m trying to follow Carten’s lead. I didn’t really understand your post....
Best regards,
Joost (who’s delighted that Forte paper will be available again soon!)
Gast
Hello,
I’m not sure if Mirko wants to reply to this himself, so here’s my take: Freestyle is a major American mail-order photography retailer that sells Ilford, Forte and probably other products under its own Arista brand at rock-bottom prices.
http://www.freestylephoto.biz/e_main.php
Roman
MKL
Hello Roman,
You should be a bit careful with the term ‘dumping’. Freestyle has been around since 1946, and ‘dumping’ means selling below cost price – somehow that doesn’t quite add up!
What Freestyle does with Arista is nothing different from what any discount chain does with its own-brand products, namely repackaging, assembling and marketing branded goods themselves. Tura, Tetenal and Orwo (in the past) do the same. Ultimately, Ilford, Forte and others only have themselves to blame if the same product comes onto the market as a no-name brand, because it is only the manufacturers themselves who sell the stuff to the packagers.
Mirko is doing exactly the same with Classic Arts products.
Best regards,
Michael
CarstenM
Hello forum members,
I can only agree with Michael. Selling ‘quality’ products under a different label is common practice, and not just in the photography industry.
Furthermore, I find Freestyle’s prices fair, but not cheap in the sense of dumping prices.
Now I’m just missing the connection with the bankruptcies of Forte and Ilford. Perhaps Mirko will comment on that?
Regards
Carsten
MirkoBoeddecker
The comment wasn’t really meant as a criticism of this ‘FreiStil’ company (they’re number one worldwide – hats off to them; the concept seems to work, even if many people find it distasteful), but rather as a tear I shed for Kentmere.
‘FreiStil’ is what it is and isn’t going to change. The blokes are too old for that.
That’s just the way it is, and you have to come to terms with it somehow.
Background:
“FreiStil” is by far the largest buyer of black-and-white photographic products worldwide.
“FreiStil” uses this market power to eliminate all other competition on the US market.
That is the company’s stated strategy.
Either they force manufacturers to sell exclusively to “FreiStil” immediately (as in this case with Kentmere), or they persuade the producers to sell to them at “special prices”.
In return, they order truly massive quantities. Quantities that would send any cost manager at an industrial firm with 60% fixed costs into a tailspin.
They then do the maths: fixed costs are covered by our other customers; marginal costs = 50%; “FreiStil” price 30% below list price; so still a 20% profit; “let’s do it!”
You then use these prices to sell to the end consumer at a price below the cost price of the factory’s other customers (let’s call it relative dumping) until they are forced to withdraw from the market entirely.
Then you are the only remaining market channel, and the manufacturer is simply “forced” into an exclusive contract in a second step and must continue to guarantee the dumping prices on top of that.
Otherwise, they would lose the US market entirely and would have to file for bankruptcy immediately.
But then the other customers’ sales decline – the contribution margin for fixed costs suddenly has to be factored into “FreiStil”’s turnover, and the manufacturer effectively starts making losses.
“FreiStil” shrugs its shoulders and says: “take it or leave it”.
This went on for nine years, and now both of "FreiStil’s" main suppliers (Forte and Ilford) are bankrupt.
I wouldn’t go so far as to say they aren’t largely to blame themselves. Unfortunately, however, these companies had no other choice.
They really were supplying at prices around 30% cheaper than to all other customers.
That was proper dumping.
In the US, this has led to a relative monotony in the retail sector.
Apart from Adorama and B&H, there are almost no retailers left that still sell B&W products at all. Because of “FreiStil”.
Where there is overlap, these products are missing entirely.
Just to clarify: I see a ‘pact with the devil’ as a metaphor for: ‘I’ll live the good life today, and in return my soul will burn in hell later’.
I don’t mean to suggest that ‘FreiStil’s’ methods are illegal or even (especially in the case of American firms) unusual.
And the end result is also clear. Of course, that wasn’t the only reason. It’s always a combination of factors.
I fully understand that the whole situation looks different from the customer’s perspective.
The customer is, of course, delighted with these prices and is pleased that “FreiStil” exists.
My perspective is, understandably, that of the manufacturer and retailer.
Mirko
P.S.:
As for the reference to Classic: we have never sold below cost – we have never let the price gap with the original become too wide and have always offered Forte a fair price for their goods. Our entire business concept is long-term and geared towards future growth. Not towards quick cash.
Of course, we would (also) love to become the world’s largest buyer of S/W products (which is totally unrealistic – I know that myself ;-).
Unlike “FreiStil”, who only buy and sell to make a quick buck, we would, for example, use this to guarantee security of supply, develop new products, support and safeguard manufacturing businesses, etc.
But our own expansion must never come at the expense of any link in the chain. Everyone must be allowed to earn a living. Otherwise, it cannot go well for long.
FOTOIMPEX reinvests approx. 95% of its profits in new products and the expansion of the company.
CarstenM
Hi Mirko,
Thank you very much for your detailed reply. That’s pretty much what I thought. It sounds very similar to the style that Aldi, for example, uses here in Germany.
Best regards,
Carsten
Gast
... and in doing so, it’s ruining the retail sector and putting pressure on manufacturers; they’ll just have to produce more cheaply – and, as a result, shift jobs to cheaper regions (the profit margin mustn’t shrink, of course; the shareholders would be up in arms...). Isn’t the free market economy just wonderful? :angry:
Roman
Gast
Hmm, it sounds quite good that Forte is set to continue. For the time being, at least. Here in Budapest, where I am at the moment, none of the various Forte dealers seem to know anything about it, though. So maybe it’s just a rumour after all...
Regards, Joern
MirkoBoeddecker
Joern,
What is a Fortedepoth?dler?
You have to order enough to last six months and pay in advance.
Of course, this isn’t so straightforward with a bankrupt company, so at the moment it’s all about payment guarantees, letters of credit, contracts for work, transfers of ownership by way of security, etc. Naturally, all this is only worthwhile for orders above a certain size. Small Budapest-based photo dealers are certainly not involved in this.
I believe Forte is currently negotiating exclusively with its 10 largest customers.
This is certainly not a ‘hoax’. Things could still go wrong – for example, a pipe might burst when the heating and air-conditioning system, which was designed for continuous operation, is reconnected to the mains after six months, or something similar might happen – but the insolvency administrator has definitely agreed to the provisional resumption of production under cost-covering parameters. If everything goes well and a profit is made, we’ll move on to the next phase.
Believe me, I know better than that.
Best regards,
Mirko
Gast
Hello Mirko,
By ‘authorised stockist’, I mean specialist retailers who stock the full Forte range. I know of three in Budapest, though there are certainly more. However, due to Forte’s insolvency and the resulting difficulties in obtaining new supplies of Forte products, their stock levels are quite low. Forte Pan SW films are still available in large quantities everywhere, but when it comes to baryta paper, supplies are running quite low for certain formats.
None of these Budapest dealers have heard anything about Forte resuming production. But your argument that, for the time being, production is intended primarily or exclusively for bulk buyers against payment by letter of credit or prepayment is, of course, plausible. Normal retailers simply don’t fall into that category.
However. I would certainly be delighted if Forte could somehow get back on its feet and I could continue to source the Forte baryta paper I value so highly without having to spend ages searching for suppliers first. Whether it’s called Forte or Classic Arts doesn’t really matter.
Regards
Jü
MirkoBoeddecker
Forte: We’ve had our order confirmed with the insolvency administrator’s signature, and our account is now empty.... :D
Hopefully, the warehouse will be fully stocked again by early February.
Our product range will be structured as follows:
Polykaltton Baryt and RC will be replaced by the new ADOX Vario Classic New.
Vario Classic is characterised by a higher silver content, improved maximum black, a higher achievable gradient (up to 5) and a stronger base (280g).
>> Click here for the ADOX website
Under the current circumstances, we will endeavour to keep Polywarmton Baryt and RC on the market as a full range with a six-month stock until the situation at Forte returns to normal.
Museum: will be replaced in stock by the new ADOX Classic Arts. However, it can still be ordered – we just cannot pre-finance stock for 3 gradients and 2 surfaces......
(Please do not forget that Forte can no longer be produced on 320g base paper either – so both papers will be cast on the same 280g base paper in future).
Classic Pan: the 400 remains in the range; the 200 will likely be replaced in the long term by ADOX CHM 100 or CHM 125, but for the time being a full range remains – it’s up to you what you buy.
In making these decisions, the issues of availability and pre-financing in particular have forced us to focus on certain areas that were particularly important.
On the other hand, there is also the increased price. If a Classic 200 is more expensive than an efke/ADOX 100, but the efke is the better film and effectively has the same speed, why keep the 200 on the market?
However, nothing has been decided definitively yet; we have simply tried to do the best we can given the circumstances. I’d be happy to hear your suggestions.
Best regards,
Mirko
