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Seeks Share of $2-Billion Market : Kodak Unveils New Line of Long-Life Lithium Batteries

May 23, 1986|NANCY YOSHIHARA | Times Staff Writer

Eastman Kodak Co., hoping to charge up its sagging earnings, unveiled the first 9-volt lithium-powered battery for consumer use Thursday as it moved to capture a share of the $2-billion U.S. battery market.

The Rochester, N.Y., firm said its new 9-volt Untralife power cell is a longer-life alternative to the conventional 9-volt alkaline batteries now available. They will also cost more--Kodak's list price will be $5.80 for one 9-volt lithium battery, compared to $3.50 for an alkaline counterpart, the company said.

In addition, Kodak will market a full line of alkaline batteries under the name of Kodak Supralife. It will import the alkaline batteries from Matsushita Electric in Japan but package them in Newark, N.Y.

In entering the consumer battery market, the giant film producer also takes its familiar brand name up against several other household names like Eveready, Duracell and Rayovac, but analysts suggested that it may be a profitable move for Kodak because battery sales are increasing steadily--both in the United States and worldwide.

It also comes at a time when Kodak--hard hit by the slow-growing photographic market and increased competition--has been slashing jobs to cut costs while diversifying into an array of high-technology markets. It has, for instance, moved into the experimental biotechnology area.

Kodak had been expected to announce its move into the $5-billion worldwide battery business this week.

"This is a good move for Kodak," said Eugene G. Glazer, an analyst with Dean Witter Reynolds in New York. "As far as profits, there will be no profits (from batteries) in 1986 . . . but at some time in 1987, it should contribute to profits."

In the first quarter of 1986, Kodak's profit plummeted 58% from the same period the year before. Its earnings for all of 1985 were down 65% from the year before. In February, the company said it planned to cut 13,000 employees from its payroll--10% of its worldwide work force.

Duracell Second Largest

Kodak will enter its new products in the U.S. battery derby this fall. Industry analysts said Eveready, which Union Carbide recently sold to Ralston Purina, dominates the market with more than half of all U.S. sales.

Duracell, which is owned by Dart & Kraft, has the second-largest share at 35%, while Rayovac and others account for only 10% of sales, analysts estimated.

Kodak is aiming to crack the market in high-performance batteries, which account for 55% of the 2.3 billion units sold in the United States and a bigger share of the dollar value of battery sales.

"With an annual growth rate of 10% to 12%, the high-performance segment of the battery market is one in which we see major opportunity for Kodak," said J. Phillip Samper, executive vice president and general manager of the firm's photographic and information management division.

Kodak said the typical U.S. home has an average of 10 battery-powered devices and some 22 batteries on hand at any given time.

Kodak said 9-volt power cells, which are used in smoke alarms, hearing aids and photographic equipment, account for about 15% of sales. Its new lithium battery, the company maintained, lasts twice as long as today's best high-performance alkaline batteries, has a 10-year shelf life (compared to two to three years for alkaline) and has gold tips on positive contact points for better conductivity.

The lithium battery, produced by Kodak's Ultra Technologies unit, is composed of three rectangular-shaped 3-volt cells, compared to the six cylindrical 1.5-volt cells contained in a conventional alkaline 9-volt battery.

Well-Established Network

Wilbur J. Prezzano, Kodak group vice president and general manager of photographic products, claimed that the lithium battery was such a breakthrough that manufacturers such as Black & Decker are already designing products to take advantage of it.

With nearly 90% of all batteries sold through the same retail outlets that handle photographic products, Kodak has a well-established distribution network for its batteries,, which will be sold under the Kodak name. It will introduce the batteries worldwide next year.

The company will back its product push with a multimillion-dollar advertising push on network and cable television, radio and newspapers. Glazer said: "They have indicated that in the fourth quarter of this year, they would spend as much on the battery business as they would spend on color film in the fourth quarter." He estimated that expenditure at $10 million to $20 million.

"This is a major push," said Brian R. Fernandez, an analyst with Nomura Securities in New York. "This should cause great concern to Ralston Purina since they just purchased the Eveready division of Union Carbide and it doesn't close until June 30."

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