Sources inform ''Globes'' that Kodak Israel, formerly Creo Products (Israel), will boost production by over 6%, compared with 2004, including purchases from subcontractors. Equipment sales totaled $165 million last year. Kodak Israel will also increase investment in R&D in 2006 by 5-6% from $45 million this year.
Kodak Israel president Michael Rolant confirmed the report, saying that the company would hire 100 R&D and manufacturing staff in order to expand its activities in Israel. The company currently has 1,000 employees at its plant in Herzliya.
Eastman Kodak (NYSE:EK) acquired Creo Products this year for $980 million in cash. The company is now part of the Kodak Graphic Communications Group, and now carrying out thorough restructuring, focused on switching from the manufacture of analog consumer products (printers, film, and cameras) to digital products.
Production and R&D in Israel accounts for about half of the company's growth. The company has nevertheless decided to stop taking grants from the Office of the Chief Scientist, because it has supported only very few projects in the company over the past two years. The company says Chief Scientist grants amount to about $1 million a year.
These grants must be repaid to the Chief Scientist on the basis of a project’s success. Kodak Israel has therefore decided that they are not worthwhile, in view of bureaucratic costs in preparing reports for, and meeting, with the Chief Scientist, and because of restrictions on the export of know-how developed with the help of Chief Scientist grants.
Two weeks ago, Kodak VP and chief purchasing officer for worldwide purchasing Richard Morabito visited Israel. He met dozens of potential Israeli vendors, and outlined the company’s for purchasing requirements and the prices it would pay. Kodak buys $7 billion in goods a year.
Rolant told “Globes” that Kodak Israel was trying to persuade Eastman Kodak to set up as many R&D projects as possible in Israel, and to expand production, after Kodak Israel was able to prove that production in Israel was cheaper than in Canada or the US.
In order to expand production in Israel, Kodak is investing $200 million in a 40,000-sq.m. plant in Petah Tikva, to which it is transferring the company’s R&D and manufacturing activities from Herzliya.
Published by Globes [online], Israel business news - www.globes.co.il - on November 22, 2005