Led by President Donald J. Trump, US International Development Finance Corporation (DFC) Chief Executive Officer Adam Boehler today signed a letter of interest (LOI) to provide a $765 million loan to Eastman Kodak Company (Kodak) to support the launch of Kodak Pharmaceuticals, a new arm of the company that will manufacture critical pharmaceutical ingredients.
The project would mark the first use of the new authority delegated by President Trump's recent executive order allowing DFC and the United States Department of Defense (DOD) to work together in support of the national response to COVID-9 under the Defense Production Act (DPA). [DFC extension]
The public loan will help support the startup costs needed to repurpose and expand Kodak's existing facilities in Rochester, New York and St. Paul, Minnesota.
“If you look at it, the 90% of the drugs we take today are generic and almost all of them are made overseas,” Adam Boehler said in an interview on CNBC. “The dominant producer of active ingredients for generics is China and number 2 is India. And so, we've said that if we re-shore and bring things back home we'll have safety and security in the future. We have to change the system." Trump called Kodak "one of the great brands in the world" and added that "then people went digital and Kodak just didn't follow through." He said the company has now hired some "of the best people in the world" for its new venture. [NYT]
The new Kodak manufacturing unit will produce critical generic pharmaceutical components, including hydroxychloroquine, that have been identified as essential but have fallen into chronic national shortage. The letter of intent (LOI) signed today at an event at the Kodak Center in Rochester attended by Kodak Management and senior government officials indicates that Kodak has successfully completed the initial DFC screening and will be followed by two "standard due diligence" conducted by the agency before the funding is formally operational.
Once fully operational, Kodak Pharmaceuticals will have Eastman Business Park capacity to produce up to 25 percent of the active pharmaceutical ingredients used in non-biologic, non-antibacterial pharmaceutical products, supporting 360 direct and another 1,200 indirect jobs. [Kodak]. According to Continenza, the pharmaceutical segment will soon reach 40 percent of the company's total turnover. Not a little.
Note:
In 1880, George Eastman, a young hobbyist photographer, with Henry Strong formed a partnership called 
Eastman Dry Plate Company. Around the age of twenty-five he began running his own Eastman Kodak Company. With the KODAK camera in 1888, Eastman set the stage for making photography accessible to everyone.
The word "Kodak" was first registered as a trademark in 1888. There has been some fanciful speculation from time to time as to how the name came about. But the plain truth is that Eastman invented it out of thin air. He explained, “I came up with the name myself. The letter “K” had been one of my favorites – it seems kind of a strong, punchy letter. It became a matter of trying a large number of letter combinations that produced the word starting and ending with K. The word "Kodak" is the result. ” Eastman also selected Kodak's signature yellow dress, which is widely known around the world.
In 1975 Kodak had invented the digital camera, but without being able to exploit the innovation, thus starting its decline. Today it has fewer than 5,000 employees after being a technology leader with 145,000 workers and technicians worldwide in past decades. In 2012 the crisis had also pushed it into receivership. He tried to diversify production and in 2015 he also launched, without however obtaining the hoped-for success, a smartphones with a vintage style. [Kodak source]
Related news: USA. No more essential medicines from China and India. They must be produced at home
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