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Promising to Protect Customers, Kodak and Collins Ink Corp. Part Ways

With each vowing that customers won’t be harmed as a result of their estrangement, Kodak and Collins Ink Corporation have come to the abrupt end of a 10-year deal whereby the latter supplied the former with inkjet inks for Versamark digital presses.

By Patrick Henry
Published: October 14, 2011

With each vowing that customers won’t be harmed as a result of their estrangement, Kodak and Collins Ink Corporation have come to the abrupt end of a 10-year deal whereby the latter supplied the former with inkjet inks for Versamark digital presses.

Earlier this week, Collins announced that it had terminated an agreement to manufacture inks under both brand names for Kodak’s Versamark continuous inkjet platform. Now, as Kodak strives to replace what it no longer will obtain from Collins, Versamark plants can choose either company as a source for their press fluids.

Having cut the production tie to its former customer, Collins will sell inks under its brand name directly to Versamark users. “We’ve gone back to being a competitor of Kodak,” said Lawrence Gamblin, president and founder of Collins.

Kodak had no ready explanation for the withdrawal by Collins. “We don’t really know why,” said Michael Marsh, general manager, Kodak Digital Imaging Systems. “We’re left to speculate.”

“Our primary concern is our customers having an uninterrupted ink supply,” Marsh said, noting that Kodak began ramping up operations in its Dayton, OH, inkmaking facility as soon as it was notified of the break by Collins. He emphasized Kodak’s commitment to preventing problems for Versamark customers while it builds to full production.

Marsh didn’t try conceal Kodak’s unhappiness with what he said was the suddenness of Collins’s exit from agreement. “The way they did it was wrong,” he said. “They left our customers in the lurch.”

This is disputed by Gamblin, who said that the break “wasn’t quite that arbitrary.” The termination was planned, he said, so that “Kodak wouldn’t suffer, customers wouldn’t suffer, and we wouldn’t suffer.”

“We’ve got a lot of friends over there,” Gamblin said of Kodak. Collins presented, he said, “a simple, straightforward roadmap” for ending the arrangement, including an offer to continue manufacturing Versamark inks for Kodak during a transition period so that customer supplies would be protected. Kodak, Gamblin said, has not responded to the offer.

To this, Kodak has replied: “Satisfying our customers remains our priority, and we are determined to do that. As for Collins, we already have legally binding terms, and Collins has walked away from them.”

Gamblin would not elaborate on his specific reasons for ending the agreement, other than to say, “It just seemed to be the right time for us to make that move.” As the company repositions itself as a direct supplier of Collins-branded Versamark inks, “we’re being a little bit aggressive in our pricing,” he said.

The announcement advises Versamark users, “you will now find that the prices you pay us will tend to be lower than what you paid Kodak for our inks.” According to Marsh, this competitive claim doesn’t faze Kodak. “We can be aggressive with price” as well, he said.

Collins already was a supplier of Versamark inks when Kodak acquired the platform as a part of its purchase of Scitex Digital Printing in 2003. When their just-terminated deal was struck 10 years ago, Gamblin said, Collins and Kodak each held half of the world of the world market (excluding Japan) for Versamark fluids.

In keeping with the terms of agreement, Gamblin said, Collins increased production of inks under both brand names to a point where it was supplying about 90% of the total—with an agreed-upon reduction in its profit margin. Gamblin said that Kodak manufactured the remainder, selling that portion at full margin and the larger volume from Collins at the reduction.

The deal was carefully constructed, Gamblin said, to be “the Hippocratic oath of inkjet” in its pledge to provide first-rate customer service and support—a promise that both Kodak and Collins say they will uphold as competing suppliers going forward.

While the agreement was in force, Kodak was the exclusive seller of Collins-branded Versamark inks, mostly black and spot-color. Collins was equipped to supply other kinds as well, according to Gamblin. “We’ve done thousands of distinct formulations through Versamark heads,” he said.

Gamblin started the company in Brooklyn, NY, in 1990 and relocated it to Cincinnati, OH, in 1994. A developer of water-based, solvent-based, oil-based, and UV-curable inks, Collins also makes fluids for printheads from Dimatix, HP, Konica Minolta, Lexmark, Videojet, and Xaar.

Marsh conjectured that one reason for Collins’s departure from the Kodak agreement might be the fact that the company had not been chosen as an ink manufacturing partner for Kodak’s new Prosper inkjet platform. “Collins was not part of that Prosper relationship,” he said.

Gamblin professed admiration for the technology behind Prosper, a high-speed, high-quality continuous inkjet printing system introduced by Kodak two years ago. “We’ll attempt to get into that market” with inks for Prosper presses, he said.

Patrick Henry, Executive Editor for WhatTheyThink.com is also the director of Liberty or Death Communications, a consultancy specializing in research, education, promotional, and editorial support services for the printing and publishing industries.

Patrick Henry is available for speaking engagements and consulting projects. To get more information contact us here.

Please offer your feedback to Patrick. He can be reached at patrick.henry@whattheythink.com.

 

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