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President Trump touted a $765 million loan Tuesday that will transform the former imaging giant Kodak into a pharmaceutical manufacturer
“It’s a breakthrough in bringing pharmaceutical manufacturing back to the United States,” Trump said at a press conference. “Kodak will now produce generic, active pharmaceutical ingredients. This is a big deal. Using advanced manufacturing techniques, Kodak will also make the key starting materials that are the building blocks for many drugs in a manner that is both cost competitive and environmentally safe.”
Shares of Kodak stock closed up more than 200 percent Tuesday. Kodak said it will build out its headquarters at Eastman Business Park in Rochester, New York, and that the loan will create at least 360 jobs, while supporting an additional 1,200 indirectly.
The company used to be a technology giant. It employed more than 120,000 people worldwide in 1973, and invented the digital camera in 1975. Kodak failed to change with photography trends and it declared bankruptcy in 2012.
Despite that, Kodak Executive Chairman Jim Continenza said that the shift to pharmaceutical manufacturing makes sense for the company.
“Kodak is proud to be a part of strengthening America’s self-sufficiency in producing the key pharmaceutical ingredients we need to keep our citizens safe,” Continenza said in a statement. “By leveraging our vast infrastructure, deep expertise in chemicals manufacturing, and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain.”
The Trump administration says that Kodak will eventually produce 25 percent of America’s “generic active pharmaceutical ingredients necessary for all non-biologic and non-antibacterial pharmaceuticals.”
This isn’t Kodak’s first foray into the pharmaceutical industry. In 1988, the company established “a new health-care business with the establishment of its Eastman Pharmaceuticals Division.” It then bought Sterline Drug in 1988.
“Kodak acquired Sterling Drug Inc., providing the infrastructure and marketing ability Kodak needed to participate in markets for ethical/prescription and over-the-counter drugs,” according to the company website. “Kodak eventually sold its non-imaging health-related businesses in 1994.”
Kodak did not immediately respond to a request for comment Tuesday.
President Trump has invoked the Defense Production Act 33 times, which amounts to almost $3.2 billion in partnerships. During the coronavirus pandemic, he has used the DPA to ramp up the production of medical supplies like ventilators and masks.
“HHS, FEMA and the private sector combined have coordinated the delivery of more than 196,000,095 respirators, 815 million, 20 million gloves, 34 million face shields and 354 million gowns,” Trump said Tuesday.