It's not that large compared to their 2022 profits, and sales were higher in 2023, and increasing this year.
Ian
TWO new film converting machines at Harman.
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It's not that large compared to their 2022 profits, and sales were higher in 2023, and increasing this year.
Ian
That's it, and nothing more. Note also that the term "partnership" has no concrete meaning in a business sense.
Banks, including Lloyds, are in it for the money. They don't do this because they want to ensure the future of analog photography. They do this because Lloyd's has apparently been sufficiently convinced that the ROI is attractive. They don't really care whether film is bring made with the investment or bicycle tyres. Of course, the bank would also claim commitment to the healthy act of cycling if it were tyres (in fact, I'm pretty sure if you peruse Lloyd's website and annual report, you'll come across ole ty of similar examples.)
And there's absolutely nothing wrong with all this. That's how investments work! It's a good sign in itself that Harman (probably with some backing from Pemberstone) have been able to present a convincing business case. Not too long ago it would have been unimaginable that a regular bank would have invested in something like this!
To clarify and perhaps take away any doubt: I think this announcement is super good and exciting news, because it shows that Harman has the will to actually survive, and they're evidently willing to take some massive bets in making that happen. They recognize that they need to build critical mass and escape from the limited B&W niche. That's all very, very good news indeed.
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OP
OP
others have posted some factory tours of Harman - from what I have previously seen Harman is using an EX AGFA "machine" (more like a small room) which takes pre-formed Cassettes and inserts the film, while winding and printing the edge markings. the videos did show that the operator was starting with pancakes which were pre-perforated, (at least in the sample she was holding) They have another Also ex AGFA machine to pack 120 film. the 35mm machine also puts the film into the plastic cans
both the existing AGFA machines do almost all of the work in the light.
Another video was posted showing (perhaps one of) Kodak's machines. Kodak tapes the film to the spool, and the machine finishes assembling the metal cassette. it also does the edge printing, {which includes a serial Number} and places the roll into a plastic can. the cassettes are assembled with one end cap in another machine and supplied to the spooling machine.
Harman did anounce a year or three ago that they had spent about a half million in setting up a "line" to make metal cassettes, as they were having dificulty in purchasing ones that met their quality standards.
it is unclear if either Kodak or Harman does the lithographic printing on the metal stock used to make the cassettes.
the news article implies that the two new machines were both for35mm and the AGFA machine for 35mm is getting difficult to maintain.
Talking with someone in the finance industry it's not "just bank talk", this is more than a loan it is a deeper partnership with the bank demonstrating more deep confidence in this than a more normal "just a bank loan" scenario.
It is good news. It helps secure the future of Ilford and Kentmere films as well as setting the stage for more Harman colour film, with more R&D going into those films.
It is good news. It helps secure the future of Ilford and Kentmere films as well as setting the stage for more Harman colour film, with more R&D going into those films.
Andrew O'Neill
Moderator
And how do we know? Maybe the banker dude shoots film 
UK banks are very prudent, so there will be some kind of surety, guarantee, they don't take risks. Remember Harman Technology (Ilford) is now owned by a wealthy investment company, and Harman's annual profits were around 10-11% of their turnover of just over £28 million in 2022.
Then remember 2023 & 4 sales were/are significantly higher than 2022, but then so are the prices we pay, so it makes more sense.
Kodak B&W films are now way more expensive than any other manufacturer, but they had less than 30% of the world market in 2007 and that's probably dropped since then. Foma are probably selling way more B&W film now than Kodak.
Ian
Then remember 2023 & 4 sales were/are significantly higher than 2022, but then so are the prices we pay, so it makes more sense.
Kodak B&W films are now way more expensive than any other manufacturer, but they had less than 30% of the world market in 2007 and that's probably dropped since then. Foma are probably selling way more B&W film now than Kodak.
Ian
Can I ask in what way, legally speaking is this more than just a bank loan e.g is the bank a part shareholder who will share the downside if the investment goes "belly up" ?
Maybe but I doubt this. As Ian has said the bank is likely to have a guarantee. No doubt it has faith that Harman will not default on the loan but what evidence is there that some kind of legal partnership has been formed?
pentaxuser
The language used in the article suggests, to my friend in the banking industry, a more close partnership than a simple business loan.
Nobody is saying there's no loan to be paid back, but that this is more than your average "I lend you 10 million quid and you pay back 14 million over x years". The bank is more closely involved as a partner and some of the vaguely quoted "eight figures" are not monetary loans but offers of multiple banking services including services aimed specifically at aiding exports.
It does not mean that the bank hasn't done due diligence or that they've acquired any shares in Harman. It means that they are very confident in this deal.
Ilford/Kentmere must be the biggest brands in B&W photography now that Kodak have effectively priced themselves out of that market (for film, anyway). Not only are they significantly cheaper than Kodak, the range of products is quite astonishing really. Foma are probably benefitting from Kodak's prices too. It will be interesting to see, in the fulness of time, what the effect on Harman finances are from the Phoenix film....the raw materials and R&D Vs the sales and profit made. Another thing my friend mentioned was that the bank almost certainly waited to see how successful Phoenix was before signing off on this.
Nobody is saying there's no loan to be paid back, but that this is more than your average "I lend you 10 million quid and you pay back 14 million over x years". The bank is more closely involved as a partner and some of the vaguely quoted "eight figures" are not monetary loans but offers of multiple banking services including services aimed specifically at aiding exports.
It does not mean that the bank hasn't done due diligence or that they've acquired any shares in Harman. It means that they are very confident in this deal.
Ilford/Kentmere must be the biggest brands in B&W photography now that Kodak have effectively priced themselves out of that market (for film, anyway). Not only are they significantly cheaper than Kodak, the range of products is quite astonishing really. Foma are probably benefitting from Kodak's prices too. It will be interesting to see, in the fulness of time, what the effect on Harman finances are from the Phoenix film....the raw materials and R&D Vs the sales and profit made. Another thing my friend mentioned was that the bank almost certainly waited to see how successful Phoenix was before signing off on this.
OK and thanks for #33. My interpretation of what the bank has done for Harman differs from yours. The bank may be providing some kind of financial "advice or service" for want of a better phrase and this may be more or less than is usual for lesser loans but that in its self does not constitute partnership in the legal sense of the word
As I said we'd have to see the contract that has been signed to really know if the loan encompasses anything other than a form of "servicing" for the loan
pentaxuser
As I said we'd have to see the contract that has been signed to really know if the loan encompasses anything other than a form of "servicing" for the loan
pentaxuser
Such as loans and possibly escrow services. Maybe Lloyds will help a little with credit checks, although IDK if Lloyds are in that business, like DNB are. That's the common stuff you generally see banks being involved in for these kinds of ventures.
I'm still struggling to make sense of the term 'partnership' other than a moderately large business account. Yes, I do know banks like to call it that. Banks also like to offer advice, often far beyond their realistic capability/insight into industries, although their core activities of course do give them some insight into what's happening in certain sectors.
Yeah, I know people in that position, too. Specifically in the position of managing teams that administer these kinds of tech-intensive business accounts. Plus, I've moved around in and around tech-ventures a decent deal over the past 2 decades or so. Hence my cynicism at the term "partnership". I know what it's worth in real life. It's a great word, though. As you can tell, it actually works - people buy into it if you spread it around. Plus, you can tag it onto any kind of relationship regardless of intensity or content, and it'll still be true. It's very, very convenient.
I suspect in this particular case, the "partnership" boils down to "Look Harman, we'll lend you the GBP10+ million for your machines, which you pay back with interest and we'll be a bit flexible in how and when you pay this. As part of the deal, we expect you to not go shopping around if you need other financial services like escrow, short-term export credit and whatever you need to 'optimize' taxes in the light of UK exports." Which would in my view be an entirely sensible approach and likely beneficial to both parties: Lloyds gets a nice chunk of business from it and probably/hopefully a healthy interest on their loan (they're a bank after all) and Harman gets access to capital they need very badly indeed, easy access to auxiliary financial services that will help them conduct their overseas transactions and an account manager they can call at any opportune moment (business hours 9-5, Mon-Fri) for any finance- and tax-related questions they may have. Perfectly sane & sensible. And yes, you can call that a "partnership" by all means. It's pretty much how all these 'partnerships' (i.e. B2B accounts) work, in general terms - specifics may and will vary on a case by case basis and unless you're the involved account mgr at Lloyds or CEO at Harman, you won't be in a position to know the details.
They certainly will have done their due diligence; if only because it's required by law. But since they're in the business of making money while reducing risk, they will have done a lot to ascertain that the risk is sufficiently low.
I'd also be surprised if any equity were acquired by the bank as part of this deal. Banks tend to not do that. There's a difference between the kind of financing structures banks use vs. venture capital.
Absolutely, and they (Harman) would have been discussing this with Lloyds as they started work on Phoenix, in all probability. The deal with Lloyds may even have been a major factor in Phoenix even being brought to the market, instead of remaining an internal milestone and evaluation material only.
As I indicated above in #27, escaping from the B&W niche is crucial if Harman wants to grow. They need to grow since that's what their owner requires. So that means they have to go somewhere, and color was (certainly in hindsight) the obvious option. Whether they'll pull it off - that's the "8 figure" question. But if you think about it, Harman don't have much choice.
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It's quite interesting mentioning the biggest R&D department, considering how (Eastman) Kodak is part of the industry. Unknown and just extrapolating of what is seen in the smarter every day videos, is that they do have R&D for reformulation and optimisation of the current products as the other manufacturers should. The very interesting part is how large this loan is and a possible Harman expansion towards Colour.
A bit of rambling about attaining high quality color: It's interesting to be a millenial in the way of being a bridge generation. I might be of the last batches that "grew up" with both media simultaneously but the new wave of film photographers come with a different perspective. An experimental, slowly improving film (aka Phoenix, Orwos), can well be a good way to get into the colour market.
Certainly, and Harman probably also recognize that when it comes to color negative film, it's actually easier to get an acceptable product to the market today. 30 years ago, you'd be grilled by any pro lab if there were crossover problems, consistency issues, coating defects etc. Today, mostly enthusiasts shoot color negative, most of those scan their film and overall they're just a whole lot less critical. I know, following discussions on Photrio would make one believe otherwise....
MattKing
Moderator
Most of Harman's business is export related, and they depend heavily on local distributors in those markets - particularly the USA - where most of their end-sales happen.
For that reason, I do see some logic in the "partnership" label, if the bank has extensive resources/connections in those export markets.
For that reason, I do see some logic in the "partnership" label, if the bank has extensive resources/connections in those export markets.
On a factory tour back in 2007 we were told Ilford/Harman had 70% of the B&W film sales market, that's likely still the case with Foma in second place, followed by Kodak.
Although the US will be their largest market, it's probably no more than 25-30%, as that Rest of the world figure also includes other large markets like Canada, Australia, New Zealand, India, South America, the Far East, etc. Plus their papers are/were rebranded in Japan.
Ian
And that's the key point - it's something manufactured in Britain (specifically the north - there are sociopolitical contexts here that the banks will be highly aware of) which is largely exported and has an aesthetic impact outside of (and outsize to) its relatively niche market share.
This slightly longer article has a bit more detail on the new kit;
‘The new kit, which will more than double the number of film cassettes Harman produces every year, has been designed from scratch and custom-built for the business. The equipment allows Harman to manufacture the metal cassettes that house the film, before ‘spooling’ the 35mm photographic film into the cassettes and boxing them ready to be shipped around the world’
yorkshiretimes.co.uk
‘The new kit, which will more than double the number of film cassettes Harman produces every year, has been designed from scratch and custom-built for the business. The equipment allows Harman to manufacture the metal cassettes that house the film, before ‘spooling’ the 35mm photographic film into the cassettes and boxing them ready to be shipped around the world’
Iconic Film Brand On A Roll Following Multi-Million Investment
Following a multi-million-pound investment in innovation, as demand continues to swell for traditional forms of photography, Harman Technology is undertaking one of the most significant film modernisation projects of the 21st century, designing and building two new state-of-the-art converting...
yorkshiretimes.co.uk
This slightly longer article has a bit more detail on the new kit;
‘The new kit, which will more than double the number of film cassettes Harman produces every year, has been designed from scratch and custom-built for the business. The equipment allows Harman to manufacture the metal cassettes that house the film, before ‘spooling’ the 35mm photographic film into the cassettes and boxing them ready to be shipped around the world’
Iconic Film Brand On A Roll Following Multi-Million Investment
Following a multi-million-pound investment in innovation, as demand continues to swell for traditional forms of photography, Harman Technology is undertaking one of the most significant film modernisation projects of the 21st century, designing and building two new state-of-the-art converting...
Thank you for posting the Yorkshire Times article.
Two statements stood out to me ( see below, my emphasise)
"The investment, supported by multi-year, multi-million funding package from Lloyds Bank, is part of Harman’s ambition to fast-track innovation in an industry characterised by its vintage processes and equipment."
"However, users have limited choice and manufacturers are battling old machinery and processes, and replacement parts that just don’t exist anymore"
I don't have any inside knowledge of the film manufacturing industry but this suggests that Harman will be at the forefront of film conversion with state of the art technology and equipment.
That alone must be a serious business advantage not only for their own products but also third party contract orders.
Good points....any newcomer to manufacturing colour film in the 80s or 90s faced a market with plenty of freely available and cheap CN film manufactured by Kodak, Fuji, Agfa, Konica and Ferrania. If anyone had tried to launch a new product, it would have to at least been as good as Ferrania...which was the "last" of the bunch but also probably the most popular as they cranked out millions upon millions of rolls to be rebranded or given away free with D&P services. And it was good enough for most users.
Today we really only have Kodak, as it remains unclear if Fuji will actually manufacture C41 film again. And we have Harman one or two others experimenting, getting there slowly. A product like Phoenix can be successful today even if it is only half way towards the goal of a "normal" C41 film. 30 years ago it would have been ridiculed.
And yes, we need to remind ourselves, as with the Pentax 17 discussions, that we here on Photrio are not representative of the people actually buying and shooting most of the film these days.
I would expect 127 and 220 to be easy introductions. The demand is certainly there for 220.
*A* demand is there for 220. The question has been whether that demand is high enough to justify the investment in a new machine to handle the production of it, and justify the cost of securing a supply of backing papers.
It is committing a lot of cash towards decreasing the sales of existing products, and the productions savings of halving your spools, boxes, and wrappers for the same 'volume' of film sales has to run a long time to make up that investment cost.
As much as I would love to use 220 film for some projects, I'm not holding my breath on any of the big manufacturers jumping in on it any time soon.
MattKing
Moderator
The backing paper manufacturers are at least half of the problem for 220. The minimum order quantities for the leaders and trailers are so much larger than even the most optimistic sales projections.
Ad that to the really large expense for new automated machinery for attaching those leaders and trailers to the film - the old machines were worn out and/or scrapped - and 220 at a reasonable cost is a non-starter.
Ad that to the really large expense for new automated machinery for attaching those leaders and trailers to the film - the old machines were worn out and/or scrapped - and 220 at a reasonable cost is a non-starter.
Wow!
This is amazing, exceedingly good news!
Thanks for sharing.
This is amazing, exceedingly good news!
Thanks for sharing.
127 is possibly doable, although difficult. You could probably convert an old 120 machine to make it with a bit of effort. 220 is another beast, its manufacturing is completely different and complex in a way 120 simply isn’t. 220 needs way more work to come back at a large scale, so it won’t. It’s just gonna be me and a few other places hand-rolling it in the dark until the backing paper runs out.
Dear Ilford. Please just continue making 120.
Best Regards Mike
Best Regards Mike
We've been through this multiple times before. Ilford/Harman's 220 confectioning machinery broke down over 20 years ago and the cost to repair it would never be recoupled in sales of 220. Demand for 220 is tiny. It always was a niche product even in the film heyday....now it's a really small sector of a market which itself is pretty small. Which is why Kodak, Fuji, Ilford, Foma aren't touching 220. Shanghai are doing it, apparently by hand. It's not so simple or easy.
127 again, it's not easy without spending a *lot* of money getting machinery together. Hand rolling isn't an option for people like Harman...it's different for the cottage industries which order 127 backing paper (probably from Harman) and hand roll.
Sure, Phoenix in more formats would be appreciated. But I think we need to take a step back and be realistic. 220 and 127 aren't anyone's priorities. And they are neither cheap nor easy to produce.
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