Eastman Kodak Co.'s move to join hands with the giant Matsushita electronics group of Japan to build a battery factory in the United States adds new momentum to Kodak's efforts to become a bigger power in this country's $2.5 billion-a-year battery market.
In recent years, Kodak has diversified beyond its traditional central product lines of film, cameras and photographic paper. In 1986, it raised eyebrows with an energetic dive into batteries, a mature market that is generally said to have no easy pickings, even for a player with Kodak's resources.
The company is making nine-volt lithium batteries on its own at a plant near its Rochester, N.Y., headquarters.
But most of its line consists of alkaline batteries that Matsushita produces in Japan under the Kodak label.
Because the yen has risen 100 percent against the dollar since late 1985, offshore production of this type is becoming increasingly expensive for Kodak.
The joint venture, which is subject to regulatory approval, will be called Matsushita-Ultra Tech Battery Corp. and have capital of $30 million -- 30 percent from Kodak and 70 percent from Matsushita.
The factory will be built at a site yet to be announced. Though it will be jointly managed, many analysts expect that it essentially will be operated by Matsushita, with Kodak's people on the sidelines as students of battery production.
Eveready, a wing of Ralston Purina Co., dominates the U.S. battery market. Duracell, which recently was put on the auction block by its parent, Kraft Inc., is No. 2. Kodak is seen as vying for the No. 3 spot, which is now held by Rayovac Corp., but it still lags far behind.
Analysts give mixed reviews to Kodak's battery operations, with some saying the company is doing well given its short time in the business.
But others think it is taking a more serious beating than it had expected. Kodak itself offers no numbers, but its venture with the Japanese suggests it is moving forward.
Some suggest that Kodak might be interested in acquiring Duracell, but other analysts believe the new venture with the Japanese has diminished Kodak's interest.
Some note that Kodak's $9 million investment with Matsushita is a pittance compared with the $1 billion price tag Duracell is said to have.
For now, Kodak has chosen as its partner a company that is an international leader in battery technology, manufacturing in a dozen different countries and claiming about 10 percent of the world market.
It is Japan's largest diversified electronics group and is familiar to U.S. consumers for its Panasonic brand. It already has a half-dozen manufacturing ventures in the United States, turning out products that include microwave ovens, cellular telephones, televisions and videocassette recorders.
Like many Japanese corporations, Matsushita is anxious to move production out of Japan because the rapid rise of the yen has bit hard into its international competitiveness.
The venture with Kodak will be the first Japanese investment in battery production in this country.
Matsushita is directly marketing batteries in this country under the Panasonic label.
Under the terms of the agreement with Kodak, the new plant's output will be jointly marketed by the two partners, which will give the Japanese a chance to expand their market share here.
Once the world's unchallenged leader in film and camera technology, Kodak in recent years has been battered by the Japanese, the emergence of home and studio video, and a court-ordered withdrawal from the instant camera business.
In the 1980s, it has cut its staffing by tens of thousands and entered new product lines, including pharmaceuticals and video equipment.
As a result, its profitability has risen markedly, and many analysts believe the company has turned the corner.