Oct 14, 2011
In an announcement that it posted on its web site on Tuesday, Collins Ink stated that it was ending its agreement to provide inkjet ink to Kodak Versamark printers. It said that its customers would be able to purchase Collins-branded inks directly from Collins at prices that it noted would be lower than Kodak’s.
In response to the Collins announcement Kodak released the following statement, which was published nearly in its entirety in the Rochester Democrat & Chronicle:
“Collins Ink abruptly and without justification breached its contract to supply inks for Kodak Versamark digital printing systems. This shows a tremendous disregard for our customers’ needs. Ensuring a continuous supply of matched, high-quality inks with inkjet printheads for our Versamark customers is of utmost importance to Kodak, and we are committed to delivering an uninterrupted flow of ink.”
The news of the partnership termination is a bit surprising given that the agreement had been in place for ten years and Collins had supplied a large percentage of the ink for Kodak’s older Versamark systems. InfoTrends has had separate conversations with Kodak and Collins, and though neither would speak to the specific reasons behind the terminated agreement, we did learn some additional information to help put the partnership’s demise in perspective.
For those who aren’t familiar with Collins Ink, the company offers inkjet inks that can be used for printheads from a range of companies including Dimatix/Spectra, HP, Kodak, Kyocera, Lexmark, Ricoh, Videojet/Atlantic Zeiser, and Xaar. Collins also sells inks for solvent-based continuous inkjet (CIJ) products. The inks Collins produces for Versamark devices are aqueous and dye based. This covers the Kodak VT and VX continuous inkjet systems as well as individual Kodak Versamark 1″, 2.77″, 4″, and 9″ printheads. Collins does not produce inks for Kodak’s Prosper systems and were still in a development process to produce pigment inks for Kodak’s Versamark VL series of roll-fed drop-on-demand (DOD) inkjet products (Collins does produce dye inks for the VL series). The latter project is now in limbo. Collins said that it was sure that adequate ink supplies would be available for Kodak customers.
Ink manufacturing is a Kodak strength. Kodak has its own inkjet ink manufacturing capability and is ramping up its own facilities to meet ink demand for products that Collins had supplied through the agreement. In addition, Kodak is the sole manufacturer of inks for its Prosper systems. It has invested years of development in Prosper and its other inkjet technologies. Certainly in the early years of any product’s life most system vendors want to own that revenue source to help offset development costs. Kodak is no exception.
No one outside of Collins or Kodak can know for sure what the real reason for the termination is. Some think that Kodak’s financial situation is at the root of the dissolution of this partnership. I don’t think so. The importance of inkjet ink in this rapidly growing market cannot be underestimated. Though today most consumables come directly from the vendor, it is clear that as the market expands there will be border wars over ink between system vendors and third-party ink suppliers. The system vendors will say that they cannot guarantee system performance and that service warrantees will be at risk when third-party inks are used. Third-party ink providers will say that their inks work just fine and cost a lot less. End users will have to make tough economic decisions about the consumables that drive their multi-million dollar investments. The end of the Collins/Kodak partnership came out in public fashion but similar battles are certainly going on behind the scenes. And there will be more.
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