Using The Defense Production Act, President Trump Turned Kodak Into A Pharmaceutical Company

US President Donald Trump announced his decision to turn Kodak into a pharmaceutical company during a press conference on July 28. Photo: CNN

President Trump said his administration would use the Defense Production Act to turn the famous Kodak camera company into a pharmaceutical company. He called this one of the most important deals in the history of the American pharmaceutical industry.

"With this new agreement, my administration is using the Defense Production Act to provide a $ 765 million loan to support the launch of Kodak Pharmaceutical," CNN quoted Trump at the meeting report on disease situation COVID-19 on 28/7 (local time).

The US president called it a "different field" from a well-known camera company, saying that Kodak is "hiring some of the best people in the world". "This is a breakthrough in bringing the pharmaceutical manufacturing industry back to the US," Trump said.

The move was the 33rd time the White House under President Trump used the Defense Production Act (DPA) after facing criticism for not applying it earlier to deal with a pandemic.

US leader said, Kodak will produce basic active ingredients, "using advanced manufacturing techniques, Kodak will also create important starting materials as building ingredients for many the drug is in a way that is competitive in both cost and environmental safety compared to almost all countries and will quickly compete with all countries."

Kodak stock price soared above 50%

The graph shows Kodak's stock price soaring after the announcement by the US President. Photo: CNBC

According to CNBC, right on 28/7 (local time), the stock price of Eastman Kodak has soared to over 50%. Kodak shares, which have been trading only in the $ 2-4 range since 2018, have at one point of the day jumped to $ 11.8. The volume of Kodak shares traded also tripled the normal session.

Soaring stock prices have pushed Kodak's market value to $ 347 million by the end of July 28. Prior to this session, Kodak had a market value of only about $ 115 million. The company says it will expand existing facilities in Rochester, New York and St. Paul, Minnesota? Through a new Kodak Pharmaceutical branch.

Kodak said it will produce ingredients that have been identified as essential but are in a chronic shortage nationwide.

Kodak Executive Chairman Jim Kodenza stated:

"Kodak is proud to be a part of the effort to strengthen America's self-sufficiency in the production of key pharmaceutical ingredients that we need to ensure safety for the Kodak. By taking advantage of its vast infrastructure, deep expertise in chemical manufacturing, and its heritage of innovation and quality, Kodak will play an important role in the return of the supply chain trusted pharmaceutical application from the US ".

Kodak filed for bankruptcy protection in 2012 when the trend to switch to digital cameras and camera-integrated smartphones has devastated the traditional camera business. The Rochester-based company has been selling off assets in an attempt to "reinvent" itself in the new situation. The move to pharmaceutical production marks a new opportunity for the worlds first-ever film and photography business.

The strategy to promote the production of medical supplies in the country has been President Trump's commercial adviser, Peter Navarro, who was recently fired for publicly criticizing Dr. Anthony Fauci, a leading infectious disease expert. Navarro told reporters that a $ 765 million loan would help create jobs in the Rochester area.