Focus on Europe report

Trade magazine for the toner and inkjet remanufacturing industry ~ making waste work

Headline Sponsor

4 - 5 June 2015 • Holiday Inn Rome Aurelia

The Recycler Live’s Focus on Europe review

In partnership with ETIRA

www.therecyclerlive.com +44 1993 899 800 [email protected]

Connett & Unland GbR

Co-Sponsors

Focus on EuropeREVIEW

2 FOCUS ON EUROPE REVIEW


Headline SponsorIn partnership with

ETIRATrade magazine for the toner and inkjet remanufacturing industry ~ making waste work

Headline Sponsor

Day OneThe first of the two days at the Holiday InnAurelia started with a series of talks fromStatic Control, the largest manufacturer of aftermarket imaging systems andcomponents.

Static Control discussionSimon Grimes, General Sales Manager forKey Accounts, introduced the companyand its official distributor for Italy,Automation Systems, and discussed StaticControl’s products and services for theremanufacturing industry.

Grimes said the company continued toinvest a lot of resources into developingchips, with the goal of creating chips thatare “more resistant to firmware changes”through emulation methods, ensuring thetechnology correctly indicates toner levels.Giving a rundown of Static Control’scomprehensive list of components, Grimessaid that each product is part of a “systemsolution” and that it is “critical for us tounderstand the OEM system so we canproduce our own”.

He also showed the company’s website,which features technical documents, a

“regularly updated” chip finder and an e-commerce site. The recently-launchedColorControl minisite was also discussed asa “great tool for customers when sellingtheir remanufactured products”, winning“Innovation of the Year” from The Recyclerat Remanexpo@Paperworld 2015.

Grimes then focused delegates on thechallenge of finding customers willing topay “what it’s worth” for a cartridge, beforeturning to upcoming opportunities. MPSwas mentioned first, as Static Controlrecently partnered with FMAudit to workon three packages: one for those unfamiliar

with MPS; the second a standard programmealready offered by FMAudit; and a thirdsystem exclusive to Static Control, whichintegrates FMAudit’s software with StaticControl’s expertise in chips. Theseofferings are said to be better than theOEMs, as the yield solutions are flexible,Grimes noted. Extended yield was anotheropportunity, because offering a higheryield may reduce cost per page (CPP) andcreate an attractive incentive to customers.

Adding copiers to your product offeringwas also suggested, as this may turn abusiness into a “one-stop shop” forconsumers where they can satisfy all theirprinting needs at once. Grimes adviseddelegates to focus on the “challenge” ofaddressing “OEM technical challengesbefore anyone else”, specifically HP’s JetIntelligence toner system, which has “setthe bar for toner usage”. The company isalso looking at industrial printing as a resultof a “direct customer request”, and itencouraged the delegates to look at theircustomer bases for ideal suppliers. Thepresentation concluded with an appeal tothe audience to “please consider what wecan bring to you”.

Technical sessionGrimes then handed over to TechnicalManager Tom Claessens, who gave aworkshop on how to remanufacture twospecific models of cartridges.

The first cartridge was the LexmarkC792, and Claessens said that print defects

The Recycler Live’s Focus on Europe review

Topics this year included how to buy a business and REACHcompliance, plus the latest market analysis for Europe and aspecial focus on the Italian market. Nicholas Dawson was therefor the two days to hear the latest from the industry experts.

Static Control’s componentsTom Claessens presents the Lexmark C792 tutorial

The Holiday Inn Aurelia




ETIRA

and error messages can be resolved usingStatic’s Odyssey toner range. The devicehas a number of features that make itinteresting from both a technical andremanufacturing point of view, including anair tube, a toner level sensing system and aflag gear. Critical elements include cleaningboth the developer roller and toner fillplug, and Static said it could get aroundpatents affecting the OPC drums, offering a “ h u g e m a r k e t p o t e n t i a l ” f o rremanufacturers.

The second cartridge was the SamsungCLP-680, which Claessens described as a“very reliable” device aimed at SMEs. Hedescribed the remanufacturing processprimarily via diagrams on Static Control’swebsite, including a long table of differentchips that could be compatible with thedevice depending on the geographicalarea, and the cartridge’s colour and yield.

ETIRA AGM and valuing productsFollowing this was the ETIRA AGM, andPresident Christian Wernhart opened with an encouragement to promoteremanufactured cartridges as an “ecoproduct”. Secretary General Vincent VanDijk then took over to give an activityreport, noting the main changes regardingOEMs starting to sue remanufacturers overpatents, while the new EU Commission hasscrapped its circular economy legislationand is considering new laws. Van Dijk plansto travel less in representing ETIRA, but theassociation will continue to fight patents inwhat may be a “collision course” with theOEMs. Also planned is an effort to“enhance again and refresh” the group’simage by developing a PR package, and VanDijk will continue giving talks on clones.

Starting the Focus on Europeprogramme itself was Static Control’sSimon Grimes, speaking on valuing your

product. He said that cutting prices is thenatural reaction to competing with thehigher prices of OEMs, particularly in theon-going competitive climate, but that thisdamages your brand, and the customerassociates price with quality. While it is“difficult to move away from the easy sale”,remanufacturers need to realise that this isnot the only factor and concentrate on thesector of the market that cares aboutquality, and think about added incentivesthey can offer.

OEMs enjoy a 92 percent stake in themarket, and the aftermarket needs to focuson its eight percent and providing a “highlevel of care”. Grimes added that there isalso a need to educate customers on theneed to update firmware and to dispel themyth that a warranty will be voided if using remanufactured cartridges. Theaftermarket needs to provide the sameproducts as OEMs, but with added quality,services and support.

Impact of REACH on tonerJan Hagemann, Managing Director ofIntegral, spoke next on REACH legislationand how it would affect the toner industryand remanufacturers. He said that whiletoner itself does not come under thepurview of REACH, it contains betweeneight to 10 chemicals which do, and that by2018 all businesses handling over onetonne of the relevant chemicals per yearwould be in scope. Hagemann furtheradvised that enforcement efforts will growin the coming years, and that Integral hadalready had an inspection in France. Copiesof documents had to be sent to theinspector beforehand, who then spent twodays on site and later compiled a report approving the business. Therelevant governing bodies include: the

Bundesanstalt für Arbeitsschutz undArbeitsmedizin in Germany; the Ministèrede L‘Écologie, du Développement Durableet de l‘Énergie in France; the Health andSa fe ty Execut i ve (HSE) and theEnvironment Agency (among others) in theUK; and in Italy itself, the Ministero della Salute.

Mergers, acquisitions andvirgin versus non-virginThe final talk of the day was from MarkPerry, MD of Clover Imaging, on how to buyand sell a business. He emphasised fromthe outset that the purpose of buying acompany is to enhance your business, andso “we want companies that are doingwell”. Another key consideration is toclarify how the company being acquiredadds to your portfolio and improves theproducts and services you offer. Clover’sacquisitions have been about “achievingvertical integration”, having made 17acquisitions in the imaging suppliesmarket, four in wireless devices and one in


Headline Sponsor

Vincent Van Dijk discusses ETIRA’s plans for the next year, alongside Christian Wernhart and Philippe Guenin

Mark Perry of Clover ImagingIntegral’s Jan Hagemann

The largest selection of enlarged hoppers availableAdditional hoppers continually being developed and introduced

New hoppers under development for the latest colour, low capacity starter cartridgesContact Triton for the full list available

• Do you have or can only get low capacity starter CE505A and CF280A cartridges for HP M401/M425MFP/P2055 printers?

• Do you need to make high capacity CE505X and CF280X cartridges?

• Triton has the answer. Fit TPE’s CC1522 HP M401/M425MFP/P2055 ‘X’ VERSION HIGH YIELD TONER HOPPER 400+ GRMS FILL (UNSEALED) to the CE505A or CF280A cartridge and solve your problems.

CC1522 HP M401/M425MFP/P2055 ‘X’ VERSION HIGH YIELD TONERHOPPER 400+ GRMS FILL (UNSEALED)

• Do you have or can only get low capacity starter CE255A cartridges for HP MFP M521/P3015 printers?

• Do you need to make high capacity CE255X cartridges?

• Triton has the answer. Fit TPE CC1560 HP MFP M521/P3015 ENLARGED HOPPER 800 GRMSFILL (UNSEALED) and the end cap CC1561G HP MFP M521/P3015 RIGHT END CAP WITH AGEAR to the CE255A cartridge and solve your problems.

CC1561G HP MFP M521/P3015RIGHT END CAP WITH A GEAR

CC1560 HP MFP M521/P3015ENLARGED HOPPER 800GRMS FILL (UNSEALED)

7FOCUS ON EUROPE REVIEW

telecoms equipment in efforts to improveits offerings. The strength of the acquiredcompany’s brand was an important factor:however, Perry warned that if the duediligence on a deal has become merely a“bean-counting exercise” then thatacquisition is “dead”.

Once completed, you should take a“business as usual” attitude, he noted, asyou will not need to radically change themodel of the acquired group if it waspreviously a success. Conversely, whenconsidering who to sell a company to, Perrysaid to target an entrepreneur rather than abusiness and to find out what “drives” thebuyer, which is admittedly difficult to knowif you don’t own a company. Good thingsto find out include the budget for thecurrent year, monthly managementfinancials for the previous year and anyouts tand ing l awsu i t s . He a l sorecommended “es tab l i sh ing themechanism for valuation rather than thevalue itself ” and concluded that the crucial factor is timing, something which“only you know”.

The sessions in the conference roomfinished for the day with an open-floordiscussion of virgin versus non-virgincartridges, and what the barriers are toreusing non-virgins. Perry started theconversation, saying that the key feature inbuying empties is the range of componentsthat make up the cartridge and that highyield is an important factor, while recoveryof empties often involves complicatedtechniques. Simon Gilchrist of BCMYadded that the components that make upthe cartridge can be repaired and sold on,and that it may be cheaper toremanufacture than dispose of thecomponents, given the WEEE regulations.

Industry presents lifetimeachievement awards to HorstEdelmeier and Heinz SiegLater in the evening there was a cocktailreception outside by the pool, giving thedelegates a chance to relax after the day’sevents, make new contacts and catch up on other businesses in the industry. At7.30pm the group moved inside for a

networking dinner, which also had anawards ceremony scheduled at the end.KMP’s Heinz Sieg had been invited topresent OCP’s Horst Edelmeier with a‘Lifetime Achievement award for Servicesto the Remanufacturing Industry ’ , unaware that Edelmeier had been taskedwith giving the same award to him. Siegcommented on his relationship toEdelmeier: “We never did businesstogether but we are friends, and maybethat’s because of that.”

Delegate feedbackA number of people at the event werethere for the first time, including a delegatefrom Dubai who said the conference hadbeen “amazing” and that he was hoping tomake new links in Europe, and twodelegates who had come over fromMoldova to represent Impro Group, wholikewise were hoping to network at theevent.

One of the more regular attendees said itwas always enjoyable to meet withcolleagues in the industry, particularly in alocation such as Rome.



ETIRA

The poolside cocktail reception

Horst Edelmeier and Heinz Sieg receive theirawards from David Connett

The delegates network over a five-course meal

Day TwoDay two started at 9am, with The Recycler’sDavid Connett introducing the day’sevents, saying that he thought the talk onbuying and selling a business the daybefore had been particularly interesting.He noted that “the question of beingREACH compl iant ” i s becomingincreasingly relevant to the industry, asinspections like Integral’s are starting tohappen.

Europe - a new marketperspectiveThe second day started with two talkslooking at market trends within Europe.The first was from InfoTrends’ AndrewCarroll, who gave an outline of verticalmarkets in Western Europe. His datafocused primarily on the UK, FranceGermany and the USA, and he said thatthese markets are mature and “no longeroffer organic growth”, although MPS isgrowing slightly.

The figures presented were based onjust under 100,000 devices beingmonitored across Europe, and anadditional survey of 1,000 print users foreach country. Healthcare is the numberone sector for printer use in all fourcountries, while in the USA manufacturingtakes second place and in Germany financeand education are big printer users, as isfinance in the UK. MPS penetration isgenerally higher for larger companies,achieving just shy of 40 percent entry intothe market for companies with over 250employees.

Carroll’s main point was that theconcentration of printer use for regionswithin a country differs according to eachsector. In Germany, public administration isquite spread out across the regions, withhigh intensity around Berlin, Munich andDüsseldorf, while finance is mainlyconcentrated around Munich andFrankfurt. For France, healthcare isconcentrated in the region around Parisand the south east, while printer use inprofessional services is mostlyconcentrated in Paris. The UK has a highconcentration for education aroundLondon and the home counties (thosewhich surround the capital) whilemanufacturing is more evenly spread out.

Office printing is predicted to remainstable in each country, although printer usein human health and social work isexpected to decline as departmentstransition to paperless systems.

Inside the CEE regionPrzemek Kowalski, Consumable ProgramManager for CEMA (Central and EastEurope, Middle East and Africa), from IDC,gave a presentation on the consumablesmarket in CEE countries and Russia. Heexplained that the research group has100,000 local analysts gathering dataaround Europe, with 28 percent of itsanalysts based in the CEMA region, and atotal of 47 percent located in emergingmarkets. Kowalski, who is based in Poland,later told The Recycler that this was the firsttime he had given this presentation. Hesaid that the “regulatory environment andcompliance” significantly affects the marketand that smartphones and tablets are nothaving the impact some think they do, aspeople still prefer to read paper. However,the analyst also commented that the end-user “will change with changes to theworkforce”, saying that a youngergeneration is coming through that is moreaware of newer technology trends andoptions.

Colour laser output in CEMA iscomparatively low, with a high percentageof the Russian market using monochromelaser over colour laser devices and thelower speed segment dominating toneroutput in CEE and Russia. Mono laser MFPsaccount for around 50 percent of toneroutput for CEMA, while toner andmonochrome printing has an 80 percentshare in the total printing market. Therehas been a marked transition to low CPPinks in inkjet, with Brother in particularincreasing its InkBenefit system’s share ofits inkjet shipments from 1.7 percent to33.6 percent from 2013 to 2014, whileEpson’s L and M series upped their sharefrom 63.1 percent to 82 percent for thesame period.

Kowalski also said there is a move tohigh-yield devices across the board and

that the growing popularity of clones wastaking market share away fromremanufacturers rather than OEMs.Clover’s Mark Perry queried this claim,which Kowalski explained was fuelled byend-users whose only concern is the price.He ended with a graphic showing that theequivalent of 135 football pitches-worth ofpaper had been printed in the 25 minuteshis presentation had lasted, or 23 millionpages, to illustrate the opportunities in thatregion.

A focus on ItalyThe next part of the conference focused onItaly itself, with a two-part discussion of theItalian market and current legislation.Giovanni Ravelli, President of ARTI Italia,the I ta l i an remanufactur ing t radeassociation, explained that Italy was one ofthe first countries to have counterfeitcartridges come into the market throughcriminal gangs, a trend which has beencurbed thanks to the ‘CAM’ legislation,which promotes the use of remanufacturedcartridges and will soon become a legalrequirement, although it currently is notimplemented in 95 percent of tenders.Over three million counterfeit goods wereinvolved in criminal police actions between2011 and 2014 in Milan alone, with afurther 30 million counterfeit goodsinvolved in civil cases. Empties collected byprivate contractors fell from 5.8 million in2012 to 4.4 million in 2014.

Another reason for optimism is theNational Action Plan (NAP) which Italy isimplementing, along with 21 othercountries within the EU, leaving just sixwithout one. The second part of thepresentation focused on the NAP, underwhich there is a minimum environmentalcriteria which aims to “promote the goal ofenvironmental policy to develop therecovery of materials” and “address the




ETIRA

Przemek Kowalski from IDC

InfoTrends’ Andrew Carroll


www.candugbr.comConnett & Unland GbR, Boschweg 43, 48351 Everswinkel, Germany. [email protected] Tel:+49 (0) 2582 9910702

Are you thinking of buying,expanding, selling or

exiting your business?

If you’d like to have an informal conversation

to find out what your options are, we offer a

free, initial over-the-phone chat.

So for confidential and friendly advice,

contact us today on

Tel: +49 (0) 2582 9910702,

or email [email protected]



problem of unfair competition” fromclones and counterfeit cartridges. Thelegislation also promotes the idea thatprice is not everything and that clones arenot the best option. It also promotes ISOand Nordic Ecolabelling standards toensure traceability and proper handling ofhazardous chemicals.

The true cost of a cartridgeThere was then a short coffee break for thedelegates, and then the final round ofpresentations began, with Delacamp’sVolker Kappius speaking on the costs oftoner cartridge production. He said thatthe market has matured for both theaftermarket and OEMs, as demand is nolonger outgrowing supply, while thedevelopment of MPS and mobile and cloudtechnology is reducing printing volume. Itis important, therefore, to have “intelligentcontrol” over the supply chain, from thebasic logistics to the service that the end-user receives. Those within the industryshould also ask what suppliers have to offerthem, and find out whether the supplierprovides a service should the customerhave a problem with the product. Kappiussuggested a number of other questionsthat need to be addressed in determiningthe cost of remanufacturing a cartridge:how much toner is needed to meet thedesired yield; do my components matchthe desired yield; and which type of toneroffers the best solution to meet this need?Remanufacturers should also consider howwell the OPC and toner system will workwith the used OEM parts (i.e. the bladesand roller).

He also said that OEMs naturally offerthe best product in terms of components,using a matched system of parts, that theremanufacturer ought to emulate as closely as possible. The re-engineeredcombination of parts may increase wear on

the printer, and he warned that non-chemical toner can build up on the fusersleeve if not manufactured carefully.Meanwhile, MPS providers need to focuson their CPP and how this is affected by thefuser unit, transfer belt and other parts,and what their respective costs amount to.

Most remanufacturers, he claimed, onlyfactor in the “lower” costs of the cartridge,forgetting other factors such as after-salesservices and repairs and whether or not theproduct’s quality limits the target group.He concluded that while there will alwaysbe a sizable portion of cartridge buyers thatdo not purchase from remanufacturers,almost 50 percent of consumers are simplyignorant of the remanufacturedproposition. Kappius also said that Chinesecartridges can always undercut on price, socompeting purely on these grounds is notthe way forward.

The “R” wordThe penultimate talk was from MarkDawson from Clover Imaging, taking asession to ‘refocus’ the group on theremanufacturing vision. He definedremanufacturing as being about returning aproduct to the market within warranty andwith the same quality as a new-build. Hementioned the positive ‘r’ words ofremanufacturing, recycling, re-engineeringetcetera, but challenged the delegates toask “are we getting that message across”?Educating customers is essential, he added,and needs to be extended to encouragingsuppliers to do the same, asremanufacturing is part of the solution tothe problem of overconsumption that isfacing humanity.

Furthermore, remanufacturing is “theultimate form of recycling”, Dawsoncommented, as the raw materials areturned into a useful item again using a

minimal amount of energy, and there is a“renaissance” for remanufacturing to come.The aftermarket needs “healthy, profitableOEMs” to provide empties to work with,while the OEMs in turn need cartridgeremanufacturers “more than ever”, withthe latter’s comparatively strong greencredentials and potential for innovationsand new product development. He statedthat the industry also needs strongsalespeople to “maximise our valueproposition” and not just sell based onprice savings alone. Price discounters needto understand how slashing prices also haslong-term effects on margin, with a 20percent discount requiring a 212 percentincrease in sales to achieve the same cashmargin.

He ended with statistics saying that10,744,000 barrels of oil were being savedin energy a year by remanufacturingprocesses, the equivalent of a year’s outputfrom five nuclear power plants. In responseto Dawson’s presentation, ETIRA PresidentChristian Wernhart mentioned that thereare a number of IP cases coming up whereOEMs are fighting against remanufacturers.Dawson added that it is not justremanufacturers who are being taken tocourt, but other OEMs as well.

It’s not about the priceFinally, Juan Alvite from Nubeprint spokeon the reality of the MPS market and gavean overview of his business’ model. He saidthat the problem with providers is that theyare still very much “in the nineties” as amarket, and recommended providers belike an aeroplane pilot, and make decisionsindependent of incoming data about thecurrent situation of the vehicle - similar tohow MPS providers must be proactive andanticipate their customers’ needs andprovide solutions accordingly. OEMs aretraditionally tied with MPS, which providesan angle for remanufacturers as they canoffer solutions with the “free” benefits ofbeing environmentally friendly and moreadaptive to customer needs, being “brand-agnostic” in their approach.

Alvite demonstrated Nubeprint’s websiteand how it provides up-to-date informationon pages printed from each device in afleet; how much ink/toner each device hasleft; and any problems that need to befixed. Returning to the aeroplanecomparison, he reminded delegates thatthe quality of service is what makes thedifference, and the MPS provider mustensure their customers receive this.



ETIRA

Juan Alvite from Nubeprint

Clover’s Mark Dawson R


THE RECYCLER HAS BEEN SERVING THE INDEPENDENT TONER AND INKJET REMANUFACTURING, SUPPLIES AND

OFFICE BUSINESS CHANNEL FOR OVER 23 YEARS...

Ever since 1991 The Recycler has been the industry’s leading hub for news, features,analysis, information and networking. With a portfolio that includes The Recycler

magazine and supplements, daily eNewsletters, a constantly updated website,networking events and resources such as marketing and recruitment, The Recycler

has become a trusted name in more than 130 countries around the world.

The Recycler reaches over 40,000* professionals around the world through itsleading multimedia platform, events and conferences portfolio.

The Recycler magazine reaches the senior decision makers in the worldwideremanufacturing, supplies and office business channel.

* including shared readership

THE RECYCLER, Wittas House, Two Rivers, Station Lane, Witney, United Kingdom OX28 4BHPhone: +44 (0) 1993 899 800 Fax: +44 (0) 1993 226 899

Email: [email protected] Website: www.therecycler.com

8,200+Global

subscribers

9,500+unique

monthlyvisitors to

TheRecycler.com

24,000+averagemonthly

visitors toTheRecycler.com

45,000+average

monthly pageimpressions

1,500+app-based

newsdistribution

www.therecycler.com/advertise

Documents

Focus on Europe report