Eastman Kodak has won a $765 million dollar government loan to help expedite domestic production of pharmaceuticals. The story was first reported by the Wall Street Journal which quotes Kodak Executive Chairman Jim Continenza as saying he expect the loan to create about 300 jobs in Rochester, and 30 to 50 jobs in Minnesota.
Federal officials are expected in Rochester late Tuesday afternoon for the official announcement.
The Journal reports that Kodak is gearing up to produce ingredients for generic drugs, including the antimalarial drug hydroxychloroquine that President Trump has touted in the treatment of coronavirus.
Federal officials also have said that the U.S. is aiming to shift from relying on countries such as China and India.
The loan comes from the U.S. International Development Finance Corporation. The Journal reports that the loan is the first of its kind under the Defense Production Act, which the Trump administration has previously invoked to speed the production of Covid-19 related supplies such as ventilators.
Continenza is quoted as saying that Kodak’s loan has terms similar to a commercial loan and must be repaid over 25 years, and he said the company will produce “starter materials” and “active pharmaceutical ingredients” used to produce generic medicines.
This will be a big shift for Kodak, a company that made its name in photography, but after a series of financial problems several years ago including filing for Chapter 11 bankruptcy in 2012, it now focuses on commercial printing and packaging with a much smaller workforce.
Continenza told the Journal that he expects its pharmaceutical ingredients to make up 30% to 40% of its business over time.
"This is about assuring our supply chains now and in the future,” said Rear Admiral John Polowczyk, White House Supply Chain Task Force Lead. “Kodak is stepping up to help onshore pharmaceutical production and this DPA action will allow the modernized Strategic National Stockpile to have domestic resiliency. Once Kodak ramps up we will have the ability to tap into that capacity for domestic use."
Adam Boehler, the CEO of the U.S. International Development Finance Corporation which will loan Kodak the money, spoke about the investment on CNBC this morning. He said that eventually, Kodak will "make 25 percent of the country’s ingredients for generic pharmaceuticals so we will not be dependent on anybody else for those key generic pharmaceuticals."
This is a developing story. Check back throughout the day for updates.