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The Trump administration announced Tuesday that it plans to grant a $ 765 million loan to Eastman Kodak – which struggled to survive after digital cameras replaced its once ubiquitous photographic film – so that the company can manufacture ingredients used in pharmaceuticals.
This is the first investment of the US International Development Finance Corp., a relatively obscure new foreign investment agency to which President Trump has given an intimidating domestic mission. The DFC is working with the Department of Defense to help find ways to replenish the national stockpile of medical supplies depleted by the coronavirus pandemic, using manufacturing plants in the United States to reduce reliance on foreign factories.
“It is unacceptable in the future that American pharmaceuticals – the generic form of pharmaceuticals – are made in China and outside the United States,” Adam Boehler, director of Development Finance Corp., said at a call with journalists. As part of this plan, the company would eventually be able to produce 25% of the active pharmaceutical ingredients needed in the United States.
Asset signed a decree in May give the DFC the power to grant loans out of Defense Production Act funds allocated by Congress in the CARES Act. Lawmakers from the House Appropriations Committee asked the Government Accountability Office, a non-partisan oversight agency, to examine the impact of the new power on the DFC’s primary mission of investing in economic development projects in other countries to counter the Chinese Belt and Road project, an infrastructure initiative.
Boehler described Kodak as a “historic brand” with expertise in making chemicals for films that it can apply to making chemicals for pharmaceutical drugs. The company plans to re-equip plants in Rochester, NY, and St. Paul, Minn., For its new division. The loan, which will be secured by the company’s assets and will include performance contracts, is still subject to due diligence before being finalized, DFC said in a statement.
The company, headquartered in Rochester, NY, filed for bankruptcy in 2012 and has since sold assets as it worked to reinvent itself. Its stock, which has been trading between $ 2 and $ 4 since 2018, soared on Tuesday to highs of $ 11.80.
The strategy to boost domestic manufacturing of medical supplies was championed in the White House by Peter Navarro, a Trump trade adviser who was recently criticized for publicly criticizing Dr Anthony Fauci, the government’s foremost infectious disease expert. Navarro told reporters the loan would help create jobs in the Rochester area.