Kodak's Ohio Inkjet Plant is Key To Company Survival

[Anonymous]

Kodak’s Ohio Inkjet Plant is Key To Company Survival 

Its Kettering inkjet operation a priority for restructured company.
KETTERING — Eastman Kodak Co.’s commercial inkjet printer business in the Miami Valley Research Park is key to Kodak’s future as the iconic company fights for its life, observers said Tuesday.

Kodak on Tuesday said it has simplified its business structure, reducing its business segments to two from the prior three, to cut costs, increase productivity and hasten its transformation to digital from its once-dominant position in cameras and film.

The restructuring took effect Jan. 1. It placed the commercial inkjet printing press business in Kodak’s digital and functional printing group, under the commercial business segment. The other business unit in the new alignment is the consumer segment.

The Kettering operation has between 500 and 600 employees and contractors and is the company’s second-largest collection of assets outside of its headquarters in Rochester, N.Y., officials said.

The restructuring stresses the importance of its commercial inkjet printing that is growing globally, said Mark Kaufman, an analyst with Rafferty Capital Markets.

“They want to get sharper hands, sharper focus, on the businesses,” Kaufman said. “That is the direction the company is heading in.”

Since 2005, Kodak has invested hundreds of millions of dollars in new lines of inkjet printers. Its commercial printers are gaining acceptance against rivals’ products, Kaufman said.

“The market opportunity is large,” Kaufman wrote in Rafferty’s Dec. 20 report for investors. “Currently, it is estimated there are 75 trillion pages printed annually worldwide. Kodak’s digital inkjet printers have the potential to penetrate book, catalog, direct mail, newspaper and promotional print markets representing over 35 trillion pages.”

Kodak’s operation in Kettering includes production, marketing, research and development for commercial inkjet printers that are sold in the United States and overseas. Customers use the equipment to print everything from utility bills to lottery tickets to government reports.

The local operation is one of Kodak’s key initiatives, company spokesman Chris Veronda said.

Kodak has convened its annual corporate meeting in Miami Valley Research Park twice within the past five years, underscoring the importance of the operation there, said Bruce Pearson, president and chief executive officer of the research park.

“We certainly think that this operation is core to Kodak’s future,” Pearson said.

Kodak signed a long-term lease, which typically lasts for at least five years, in the fall of 2011 for the 320,000-square-foot building it occupies in the research park, he said.

Overall, Kodak has struggled. The company has been unprofitable for most of the past decade. For the third quarter of 2011, the company reported a loss of $222 million, or 83 cents per share, from continuing operations, compared with a loss of $43 million, or 16 cents per share, in the same period of 2010.

The Wall Street Journal reported last week that the company is preparing to file for bankruptcy. The company declined comment on the Journal report.

Kodak is to report its 2011 and fourth-quarter results Jan. 26.
The company’s shares closed Tuesday at 60 cents, up 20 cents for the day, but down sharply from the past-year high of $5.70. The New York Stock Exchange warned Kodak earlier this month that the market would drop the stock if the price remained below $1 per share for the next six months.

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January 12, 2012 at 8:34 AM