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Recycling Times Magazine

RecyclingTimes The magazine by the industry, for the industry.

Publisher & Managing Director Tony Lee tony@therecycler.com.cn

Directors

David Gibbons david.gibbons@therecycler.com.cn Sabrina Lo sabrina@therecycler.com.cn

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December 2010 | www.recyclingtimes.com.cn

editorial editorial www.recyclingtimes.com.cn

A

cquisition has become a hot topic again. Recently MBP Group announced the acquisition of Spanish compatible cartridge producer GTA Sistemas. Last December, NER Data Products sold the NER Imaging Supplies division and its wholly owned subsidiary Image1 to Clover Technologies Group. This year in April, Print-Rite acquired a major controlling stake in AEG Photoconductor (Shanghai) Co. Ltd. (APS) and Media Sciences acquired Master Ink in late April. Then Armor Group bought Wecare4 in May. The majority ownership of Clover Technologies Group and West Point Products was transferred to Golden Gate Capital in June. Future Graphics Imaging Corporation merged into its parent corporation, Mitsubishi Kagaku Imaging Corporation in July. On October 25, 2010, German KMP PrintTechnik AG acquired Intercopy Holding GmbH. Clover Holdings acquired Environmental Reclamation Services (ERS) in mid-November and Luke Entertainment acquired AccuBrite. We can see from the above mentioned cases that there were only two Chinese aftermarket players involved in those acquisitions. With over 500 companies in China, how can the number of acquisitions be so low? Apart from imperfect enterprise management, core technology and private owned brands, some excellent companies fail to realize acquisition because they are not familiar with the processes of mergers and acquisitions. Or some international buyers are afraid of potential failure during integration posed by culture differences. This brings us back to one word: communication. Trade shows provide a great platform for the industry to communicate and understand each other better. Zhuhai Expo 2011 is scheduled from October 13 to 15 in Zhuhai. It is estimated that 400 exhibitors and nearly 10,000 visitors will attend the event. Looking forward to meeting you in Zhuhai!

Tony Lee Publisher & Managing Director All rights reserved. © 2010 by Recycling Times Media Corporation. The contents are not be to copied or republished without official written consent. The editorial content does not represent official positions of Recycling Times Media Corporation.


Recycling Times Magazine

contents contents

Static Control comments on Lexmark's denied retrial motion

Lexmark and Static Control have both filed notices of appeal. Static Control seeks substantial damages caused by Lexmark’s anti-competitive behavior and unfair and deceptive trade practices. Lexmark is expected to appeal the same issues which Judge Van Tatenhove rejected in his recent order.

www.recyclingtimes.com.cn

Just a Minute with David Gibbons

4

Re-USE, Re-USE, Re-USE!

OEMs continue to grow in Q3 Office 3Q 2010 Actual / FY 2010 Projection (Billions of yen)

Sales

0

Industry Updates

6

Op. Profit

3Q

900 600 300

150

404

507

3Q09

3Q10

0

18.5%

80

76 3Q10

0

3Q10

15.1%

59

3Q10

(E Excluding l di new consolidation effects )

Leading printer manufacturers such as Xerox, Lexmark and Canon have reported their third quarter performance and both demand and sales are up, resulting in higher profits or revenue.

FY

+20.6%(+27.7%)

1,645

2,015 1,984

1,737

FY09 FY10 FY10 FY10

Current Previous Current projection projection Projection ( Excluding new consolidation effects )

OP ratio

750 500 250 0

+27.7%

17 7% 17.7%

293

308

13.9% 14.1% 14.8%

229

285

FY09 FY10 FY10 FY10 Previous projection

Current projection

Current Projection ( Excluding new consolidation effects )

Static Control comments on Lexmark's denied retrial motion

Speed Infotech expands worldwide

HP settles with Mipo, SinoTime in inkjet 337 case

7

433

1,000

( Excluding new consolidation effects )

Growth rate y/y +30.3%

3Q09

3,000 2 000 2,000

OP ratio

100 14.5% 50

(Billions of yen)

Growth rate y/y ( ) Local currency base

+25.6%(+35.7%)

Speed Infotech CEO hinted at plans to launch a new international distribution hub outside of the Chinese mainland. “We have been studying the investment opportunities in Europe and hope to release details about our company expansion projects in the coming months.”

Lexmark vs Ninestar et al. case over toner scheduled for hearing FG conducts free STMC training for customers in China US, UK and Canada issue new rules for air cargo of printer cartridges

8

Media Sciences sells toner business to Katun MBP Group acquires GTA Sistemas

9

OEM News

Kyocera Mita sieze counterfeit toner cartridges

15 16 17

FG releases Kaleidochrome color chemically produced toner (CPT) and OPCs

Features

18

Faroudja Toner announced drum for Xerox Docucolor C3535 Apex releases ink and laser chips for HP128A and Dell 21 devices

12

Chips for Xerox 6121 from Hi & Bestech company

Canon India launches exclusive brand store OEM expansion plans for 2011

Product Release

11

HP opens design center for printers in Singapore Fuji Xerox to enter home laser printer market

Sensient opens new plant in Guangzhou Print-Rite wins Hong Kong Outstanding Corporate Citizenship Award

Ricoh puts fingerprint technology on printers

2010: A year in review

Market Data

33 Visitor survey at RemaxAsia Expo 2010 36 OEMs continue to grow in Q3

MSE releases solid ink sticks for Xerox Phaser color pirnters

Profiles

Tianyi Technology offers chips for Samsung

OEM News

15

42

Tech Zone

HP hits one billion cartridge milestone Xerox works with Close the Loop to recycle returns

Speed Infotech expands worldwide

44

Remanufacturing the Xerox Phaser 3100 Toner Cartridge

www.recyclingtimes.com.cn | December 2010

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Recycling Times Magazine

Just a Minute with David Gibbons

Re-USE, Re-USE, Re-USE! The catchcr y of the remanufacturing industr y for more than two decades has been all about re-use. In fact in the sustainable environmental hierarchy (reduce-reuse-recycle) “re-use” is a much better result than “recycle”. And now it appears terrorists have picked up on the idea too. Dubai police found explosives inside a printer cartridge onboard a cargo plane from Yemen (see photo). Intelligence experts say they bear the hallmark of al-Qaeda and represent a shift in terrorist tactics to commercial targets. Yemeni forces arrested a woman after surrounding a house in the capital Sanaa. The news of the arrest came as the British Government confirmed that the sophisticated bombs—contained inside the printer cartridges —were designed to explode mid-air on their way to the United States. According to various news sources, the cartridge bombs contained the same powerful explosive used by the so-called Underpants Bomber in the alleged plot to blow up a plane over

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December 2010 | www.recyclingtimes.com.cn

Detroit on Christmas Day last year. So is that where all the empties are going? In all seriousness though, could the shipping of empty printer cartridges to remanufacturers —needing to “reuse” them as printer cartridges — be threatened? Will this alleged terrorist plot now hold up the supply of empties because they could possibly be bombs? The real challenge is to convince governments that the granulating and stripping down of cartridges and recycling them into plastic rulers and park benches is the last stage of the process—reserved only for those parts of cartridges which cannot be used again. But that argument has become all the more difficult now, as governments may order ALL used printer cartridges to be granulated so that they do not end up in the wrong hands.


Recycling Times Magazine

Industry Updates

Static Control comments on Lexmark's denied retrial motion

L

exmark International Inc.’s motion for a new infringement trial was denied on October 28, 2010. Lexmark sought to reverse the June 2007 jury verdict which found that Static Control did not induce infringement of Lexmark’s patents, and that Static Control’s customers did not infringe Lexmark’s patents. In a 37-page ruling, U.S. District Court Judge Gregory Van Tatenhove rejected Lexmark’s arguments, and upheld the jury verdict in favor of Static Control in its entirety.

Edwin Swartz, president of Static Control, was pleased with the ruling. “When Lexmark sued us on New Year’s Eve, eight years ago, I told the press that this was round one in a 12 round fight,” Mr. Swartz said. “Well now we are at the end of round 12, and Static Control is still standing.” Mr. Swartz said that the jury and judge’s verdict were good for the remanufacturing industry and good for consumers. “The court’s decisions encourage competition which gives consumers a

wider range of choices at better prices. Lexmark was trying to exclude competitive chips which meant higher prices in the market,” said Mr. Swartz. Lexmark and Static Control have both filed notices of appeal. Static Control seeks substantial damages caused by Lexmark’s anticompetitive behavior and unfair and deceptive trade practices. Lexmark is expected to appeal the same issues which Judge Van Tatenhove rejected in his recent order.

HP settles with Mipo, SinoTime in inkjet 337 case

H

ewlett-Packard Co. has asked an administrative law judge to dismiss Mipo America Ltd. and SinoTime Technologies Inc. from a Section 337 investigation over ink cartridge patents, saying it has reached settlements with the companies. HP and its Houston unit Hewlett-Packard Development Co. LP filed motions in the US International Trade Commission (USITC), asking Administrative Law Judge Robert K. Rogers Jr. to cease its investigation of Mipo America and SinoTime Technologies as it has reached a settlement with them. The USITC began investigating the companies alongside several others in relation to a 337 lawsuit alleging the use of patent infringing and potentially stolen HP parts. Administrative Law Judge Robert Rogers Jr. said of both cases: “I find that termination of this investigation does not impose any undue burdens on the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers.” Therefore, he decided to grant both motions, though this is only an Initial Determination, and is subject to review by the Commission. The terms of the settlements are currently confidential.

6

Hongwei Shang, the attor ney representing Mipo America and SinoTime also refused to offer details on the settlements. H o w e v e r, S h a n g d i d s a y t h e agreements were in no way connected to recent unsuccessful attempts by other Mipo entities to exit the case via consent order. In September Judge Rogers denied the exit attempt by the Mipo Technology units, saying the consent order should have contained a mention that the ITC has subject matter jurisdiction in addition to other kinds of jurisdiction. It also should have declared that Mipo Technology expressly waived all its rights to seek judicial review or otherwise contest the validity of the consent order, according to the judge. The order additionally left out any reference to the stipulation being “for settlement purposes,” Judge Rogers said. The Mipo Technology units' latest termination motion, lodged on October 19, remedied the omissions, according to the companies. The ITC opened a review in June into whether the Mipo entities, SinoTime and others infringed the HP patents-in-suit, which cover thermal inkjet printing devices and specifically inkjet cartridges that include a printhead.

December 2010 | www.recyclingtimes.com.cn

The commission voted to take on the case after HP complained in May that the respondents were importing and selling cartridges with printheads and other components that infringed the asserted patents. HP filed a parallel suit May 20 in the US District Court for the Northern District of California against the same companies over the same six patents. Under HP's claimed inventions, a microcomputer activates ink jets on the moving printhead to appropriate locations, causing the printhead to eject ink drops onto the printing surface and to form desired images and characters. The patents-in-suit are U.S. Patent Numbers 6,234,598; 6,309,053; 6,398,347; 6,412,917; 6,481,817; and 6,402,279


Recycling Times Magazine

Industry Updates

Lexmark vs Ninestar et al. case over toner scheduled for hearing

T

he judge ALJ Charneski announced two orders for the schedule of Lexmark against Ninestar and some 20 companies over toner patents. March 12, 2012 was set as the target date (which is 17 months after the institution of the investigation). The judge further indicated that the Initial Determination on violation shall be due November 10, 2011. In another order, the judge set the procedural schedule for the investigation, including an August 15, 2011 start date for the evidentiary hearing. This case was filed on an August 20, 2010 following a complaint by Lexmark International, Inc. of Lexington, Kentucky alleging violation of Section 337 in the importation into the US and sale of certain toner cartridges and components thereof which infringe certain claims in US patent numbers. 5,337,032, 5,634,169, 5,758,233, 5,768,661, 5,802,432, 5,875,378, 6,009,291, 6,078,771, 6,397,015, 6,459,876, 6,816,692, 6,871,031, 7,139,510, 7,233,760, and 7,305,204.

FG conducts free STMC training for customers in China

F

uture Graphics (FG) demonstrated its commitment to technical support and training in China by providing free STMC training for its customers. The training session was conducted by Mr. Will Niederstadt, a 20-year industry veteran, and took place from August 23 through September 1. Six different Chinese businesses sent a total of 50 representatives to achieve certification. Participants included Beijing Laser HiTechnology Co. Ltd.; Jie Sheng (Zhuhai) Technology Co. Ltd.; Pacific Plastic Product (ShenZhen) Ltd.; Zhuhai TopColor Image Products Inc.; Zhuhai Top-Print Technology Co. Ltd. and Zhuhai Kolion Tech. Co. Ltd. - Jet Rise. Mr. Dick Yu, General Manager, Future Graphics China, said, “Since STMC certification is viewed favorably around the globe, it’s an important step in the development of the remanufacturing and recycling industry. We are happy to help our customers gain this certification with greater efficiency.” Mr. Du of Beijing Laser agreed. “STMC certification provides a more systematic method to regulate quality,” he added. “Now that we have professional testing standards, we have clear guidelines in which to conduct quality management.” For more information about STMC, contact katie@i-itc.org or go to http://www.i-itc.org/standards.htm.

US, UK and Canada issue new rules for air cargo of printer cartridges New security rules banning printer cartridges from US New US security rules are in place banning all cargo from Yemen and Somalia and prohibiting toner and ink cartridges weighing more than one pound from passenger flights. The new rules are a direct response to the thwarted terror plot that could have taken down two cargo planes over the US last month. Terrorists in Yemen had hidden two powerful bombs inside printers and shipped them to addresses in Chicago. As well as the bans, high risk cargo will no longer be allowed to fly on passenger planes. Until now, the US has required that high risk cargo be screened before it's loaded onto US-bound passenger planes. UK to bar unaccompanied air cargo from Yemen, Somalia UK also barred unaccompanied air cargo from Yemen, Somalia after ink cartridge bomb. From November 9, 2010, air passengers flying from UK airports will be banned from carrying larger printer cartridges in their hand baggage for at least a month. Sending larger printer cartridges by air cargo out of or into the UK will also be prohibited, unless the sender ships through a government-approved shipper. The banning of larger printer cartridges – any cartridges weighing over 500 grams (17.6 ounces) – in hand luggage and air cargo will be in place for a month initially. Canada creates new security rules Canada announced several new aviation security rules, including restrictions involving large office-sized printer toner cartridges, just days after it banned all air cargo originating from Yemen. Passengers are no longer allowed to take large printer toner cartridges in checked bags on any flights departing Canadian airports, or in carryon bags on any outbound flights from Canada to the US, Transport Minister Chuck Strahl announced November 8, 2010. Passengers are still allowed to carry smaller toner cartridges, such as those used in home printers. The new security measures were effective as of November 8, 2010.

www.recyclingtimes.com.cn | December 2010

7


Recycling Times Magazine

Industry Updates

Kyocera Mita sieze counterfeit toner cartridges

K

yocera Mita has become the latest OEM to crack down on counterfeit cartridges, taking out an injunction against a firm caught importing counterfeit toner cassettes into Ireland, according to a report by Yahoo. The counterfeit haul has been valued at over £430,000 by Kyocera Mita and the importing company, which has not been named, has been ordered to pay the vendor’s legal costs.

The case was brought to the vendor ’s attention by a Dublin-based partner who had concerns over the authenticity of the products and handed them over to the vendor. Kyocera Mita tested a batch, confirmed they were not genuine and has now issued the firm with an injunction ordering it to hand over the counterfeit goods. Jun Okumura, general manager of Kyocera Mita, said taking action against counterfeiters

was always a priority for the firm. He said: “ We will not tolerate trade in counterfeit products, and will rigorously pursue all parties in the distribution chain to protect our intellectual property rights. We see this as an important part of our role of safeguarding the revenues of our channel partners who could otherwise see unfair and unlawful competition from sales of counterfeit products.”

Media Sciences sells toner business to Katun

M

edia Sciences International, Inc. announced the sale of its toner business to Katun Corporation, a Monomoy Capital Partners portfolio company. On November 8, 2010, Media Sciences Inc., a subsidiar y of the Media Sciences International, Inc., entered into an asset purchase agreement (APA) with K atun Corporation and one of its subsidiaries. Under the terms of the APA, Katun purchased assets used in the seller's toner business, including, inventor y, fixed assets, and intangibles (including the seller's business name and trademarks) for approximately $11 million (the amount is subject to adjustment based on the value of the seller's inventory

as finally determined within 30 days from closing). Katun also assumed the liability for all of seller's unfulfilled purchase orders, for a defined amount for returns and allowances, and for any post-closing liabilities under all assigned customer and vendor contracts arising out of the seller's toner business, but not for any of seller's other liabilities. At the same time, Katun and the seller also

entered into a master distribution agreement by which the parties agreed that Katun will be the exclusive worldwide distributor of the seller's solid ink products for use in Xerox color printers for a period of 3 years. The parties also entered into a license agreement allowing the seller and its affiliates to continue using its business name and websites for up to two years. The company also announced changes in its leadership team. Michael Levin said the sale was “the right decision for all constituents including shareholders, customers, employees and vendors”. He expects that the MSI business will “thrive within the Katun infrastructure". The company intends to host a conference call at a later date to discuss its future opportunities.

MBP Group acquires GTA Sistemas

R

ecently, MBP Group has bought the Spanish company GTA Sistemas. Through this move it aims to strengthen its position on an international level and get closer to its Southern European partners. GTA Sistemas is a major player in Spain. With 18 years of existence, its distribution network will be of great benefit to MBP Group. Located between Nantes and Tangier, the new

8

December 2010 | www.recyclingtimes.com.cn

entity of the group will allow MBP to optimize its commercial position. The company states that its bigger size and new competences will help MBP Group to take up tomorrow’s challenges. After the acquisition, the GTA team will be kept as well as the Ocean range of products which is marketed by the company. MBP has a strong export position and intends to continue its international development

after the creation of a production plant in Tangiers in 2008. MBP Group is now present in two continents (Africa and Europe), in three countries (France, Morocco and Spain) and has about 160 employees. GTA Sistemas was founded in 1992 in Barcelona developing its recycling activity together with the sale of compatible cartridges. GTA Sistemas employs 30 people and had a turnover of 5 million Euros in 2009.


Recycling Times Magazine

Industry Updates

Sensient opens new plant in Guangzhou

S

ensient Technologies Corporation has announced the official opening of its new plant in Guangzhou, China. The new facility includes an office and laboratory building and production areas for both food and non-food products. With the addition of this facility in Guangzhou, Sensient now has a presence in five locations in China. Around the world, Sensient has over 70 locations that provide specialized flavor and color applications in 30 countries, selling to more than 150 nations. The new Guangzhou location contains laboratories for research, application development and quality control. The facility will significantly enhance Sensient's capability to produce food and beverage flavors and colors as well as fragrances and

pharmaceutical coatings. At the official opening, Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation, said, "This manufacturing facility is a key part of our global strategy and it strengthens Sensient's presence in China. The Guangzhou location positions Sensient for growth in one of the most dynamic economies in the world. It greatly increases our production capabilities with state-ofthe-art equipment and new processing technologies." Other Sensient locations in China include a plant for processing dehydrated flavors in Qingdao, a technical center and sales offices in Shanghai, and offices and laboratories in Beijing and Hong Kong. Sensient also announced its financial report

for the three months ended September 30, 2010. Consolidated revenue for the third quarter of 2010 reached an all-time record level of $340.9 million, an increase of 12.4% compared to the same period of last year.

Print-Rite wins Hong Kong Outstanding Corporate Citizenship Award

P

rint-Rite Holdings Ltd. has won the silver award in the manufacturing sector category of the Hong Kong Outstanding Corporate Citizenship Award 2010. The award presentation ceremony was held on November 8 and officiated by Mr. Henry Tang, Chief Secretary for Administration of the Hong

Kong Special Administrative Region. The Hong Kong Outstanding Corporate Citizenship Award is one of the activities of "The Hong Kong Corporate Citizenship Program� organized by the Hong Kong Productivity Council. The aim of the program is to promote the awareness of corporate citizenship among local enterprises

â–˛ Award presentation ceremony

and to encourage enterprises to establish their civic responsibility values for incorporation in their business strategies. Such concepts can be further promulgated to employees, their families, customers and the public. Print-Rite was proud to receive this award in recognition of its achievements in the implementation and promotion of corporate social responsibility. The company pledges to continue to invest resources in environmental protection, product safety, staff welfare and activities supporting the community as well as to provide customers with quality products and best services through continuous innovations. "We are extremely delighted to receive this prestigious award. We will continue to put more resources in corporate social responsibility to support the society and the community as well as to protect the environment," said Mr. Arnald Ho, Founder and Chairman of Print-Rite Holdings Limited. www.recyclingtimes.com.cn | December 2010

9


Recycling Times Magazine

Product Release

FG releases Kaleidochrome color chemically produced toner (CPT) and OPCs

F

uture Graphics has begun shipping its world-renowned color chemically-produced toner (CPT) and color OPCs under the Kaleidochrome brand. FG said the Kaleidochrome brand features the same high quality CPT and color OPCs that customers have always received from FG, sold under the same item number. There is no reason to requalify because it is the same product, producing the same high yield; the same superior fusing and the same OEM-like print quality. FG ships from three North American and nine international distribution centers. For more information, please contact FG.

Faroudja Toner announced drum for Xerox Docucolor C3535

F

aroudja Toner has released a new drum for the Xerox Docucolor C3535, it was announced. “We came out with the toner four months ago, and it has been a steady seller.” explained marketing director Tim Farrell. “So we’re pleased to now offer the drum.” The Faroudja drum for the Xerox Docucolor C3535 is without gears, and is sold in any quantity the customer requests. Special discounts are available if the product is bought in cases of 50. The company says that recycling the drum unit is not difficult, and complete instructions are available. “We think this is a good opportunity, as the OEM drum units are over $200 and we can give you a really low price on the drum” added Farrell. Faroudja also released color toner in bags for the Samsung CLP 315 in November. Ten kilogram (22 pound) bags are sold for black, cyan, yellow • Contact Faroudja Toner and magenta, and Tel: +1 650-593-3862 can be purchased Fax: +1 650-593-3817 individually or in Website: www.faroudjatoner.com. multiple quantities.

Apex releases ink and laser chips for HP128A and Dell 21 devices

A

pex believes it has released the first-to-market replacement chips for the HP 128A series color toner cartridges and Dell 21 series inkjet cartridges. In September 2010, Hewlett Packard released the Laserjet Pro CM1415fn/fnw, a new series of color laser MFPs, which have aroused great attention for their compact design, advanced functions and great pricevalue ratio. Based on a well-established technology platform for HP chips, Apex became, according to the technical staff of Apex, “the first one among the industry to launch the replacement chips with only one month’s efforts”. These replacement chips have comparable functions to OEM chips, featuring a unique serial number and firmware resistance. This series of chips is designed with ASIC

technology, compatible with Apex’s Unismart system. The ASIC design guarantees the chips with low driving voltage, low power consumption, high stability, and high communication speed. Customers could use these together with the company ’s Unismart system to achieve flexibility and universality. Also released are replacement chips for the Dell21 series, for use with Dell V313/ V313W/P513W, DellV515/515W/P713/V715W series printers. These are fully emulated and verified by repeated tests, with functions comparative to OEM. The chips in this series have been built with Apex’s proprietary duecore technology, which allows the cartridges

to print more than 20% than the OEMs’. In addition, Apex released new inkjet chips for the Canon iPF510 Series and new laser chips for Ricoh C220 and Lexmark X203/204, OKIC5600/5700/5650/5750/5800/5900/5850/5 950 cartridges. For more information about newly released chips, please visit www.apexmic.com, or contact Apex’s account manager.

www.recyclingtimes.com.cn | December 2010

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Recycling Times Magazine

Product Release

Chips for Xerox 6121 from Hi & Bestech company

H

i & Bestech company has released chips for Xerox Phaser 6121color laser printer cartridges. “Thanks to our R&D team special design, our chips are working worldwide” said Alvin Hsu, sales director of Hi & Bestech Company. Xerox Phaser 6121 printers’ specifications: • Print Speed : Color up to 5 ppm and Black up to 19 ppm • First-page-out time: 13 seconds monochrome and 22 seconds color • Max. resolution :1,200 x 600 dpi x 1 bit • Paper input: Standard: 200 sheet multi manual tray • Monthly duty cycle: 2,600 pages Hsu continues, “As an industry partner for chip solutions, our team is composed of qualified engineers with more than 20 years on chip solutions and production. Hi & Bestech chips are full emulation with 100% functionality but unique circuit and firmware design from OEM ▲ CHIP for Xerox 6121 chips for Intellectual Property protection and are fully RoHS • Contact Hi & Bestech compliant”. Webisite:www.tonerchips.com For more information, please E-mail: info@tonerchips.com contact Hi& Bestech.

MSE releases solid ink sticks for Xerox Phaser color pirnters

M

icro Solutions Enterprises has announced the release of a complete line of solid ink sticks for Xerox Phaser color printers. MSE is now offering all of the most popular models of compatible solid inks for models such as the Xerox Phaser 8400/8500/8560 and more. Luke Goldberg, SVP at MSE Global says: “These products are a great way to expand your color offering for these solid ink printers. Solid inks offer great margin and revenue opportunities for resellers seeking quality alternatives to high priced OEM consumables.” MSE is currently offering these in generic packaging due to the custom requirements of this product. As volumes dictate, MSE plans to expand the packaging options available for this product. MSE utilized patent pending SCS technology to release toner cartridges for the very popular CP3525 printers (CE250A/CE252A) last month. MSE has multiple certifications and accreditations including ISO 9001 and 14001. As well as its engineering prowess, MSE also prides itself on offering the highest levels of after-sales support to its dealers through its consultative sales and marketing programs. For more information, please go to the webisite www.mse.com or call +1 818-407-7500.

Tianyi Technology offers chips for Samsung

S

henzhen Tianyi Technology has announced the release of chips for Samsung ML1911/2526/2581/651/4601/ 4623 printers. The product code for the newly-released

12

product is SMAR-S1911 and it is intended for use in the MLT-D1053S/D1053L cartridge. The print yield for this dedicated chip is 2,500 pages (Black) which is the high yield of Samsung’s cartridge in accordance with ISO/IEC 19752. “ We are excited to supply the first-tomarket chips SMAR-S1911 for Samsung ML1911/2526/2581/651/4601/4623 printers to the reindustry and support recyclers all over the world”, said Jacky Chen from Shenzhen Tianyi Technology. Samsung ML1911/2526/2581/651/4601/4623 series printers are for everyday document production in the office. They are designed to meet all the needs of the standard office, whether that is black & white, single-sided or

December 2010 | www.recyclingtimes.com.cn

double-sided, single sheet output or booklet. The devices enjoy a first page out time of less than 10 seconds and monthly duty cycler of up to 10,000 pages. About Tianyi Technology Shenzhen Tianyi Technology Co., Ltd is specialized in R&D, sales and marketing of chips for cartridges. It has been compliant with ISO 9001 quality standards since 2002.

• Contact Tianyi Technology Tel: +86 134 807 381 01 Email: yjdy888@163.com Website: www.sz-tykj.com


Recycling Times Magazine

OEM News

HP hits one billion cartridge milestone

H

P announced that it has manufactured one billion ink cartridges with recycled plastic supplied from its closed loop cartridge and recycled water bottles recycling program. Along with hitting the big one billion milestone, HP also announced plans to continue to decrease its environmental impact by achieving new goals, implementing more efficient programs and creating ways for the customer to continue to be involved. Having already collected approximately 160 million HP ink cartridges and 1.3 billion plastic

bottles, the company has pledged to use a total of 100 million pounds of recycled plastic in printing products by 2011 (over a four year span starting in 2007). According to HP, it has managed to reduce its carbon footprint by an estimated 22%, fossil fuel consumption by 50% and total water use by 69% when compared to using virgin (new) plastics. Beyond that, based on a new streamlined recycling procedure started this year, the reduction in total water use and carbon footprint is an estimated 89% and 33%, respectively. HP recently introduced the HP Envy e-All-

in-One, its first PVC-free printer and the HP Deskjet 3050 all-in-one, made from 35% recycled plastic.

Xerox works with Close the Loop to recycle returns

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erox Corporation launched a new return and recycling program to return toner and supplies and expand the company’s effort to keep billions of pounds of waste out of landfills. "Our role at Close the Loop is to make the returns process that much simpler so more customers join in on the effort. Working together with Xerox we push the goal of zero waste forward to minimize our impact on the environment.”

Xerox is partnering with Close the Loop, one of the world’s largest recyclers of imaging supplies. Close the Loop will collect customers’ returns and manage the recycling on behalf of Xerox using a patented material separation process that recovers used materials for reuse in new printer cartridges and other products. In an initiative similar to Xerox’s popular Eco Box program in Europe, customers in the United States will place used supplies into a collection box. When the box is full, customers

print a free-of-charge shipping label and send the box to Close the Loop. Instructions are printed on the boxes, which are now available in the United States. Customers can order the boxes through the redesigned return and recycling website. "During the past 12 years, our collaboration with customers has kept more than 143 million pounds of cartridges, bottles, and waste toner out of landfills,” said Patricia Calkins, vice president, Sustainability, Environment, Health & Safety.

Ricoh puts fingerprint technology on printers

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icoh has put biometric authentication technology on its latest multifunction printers as part of a new strategic alliance with Equitrac and BioStore. They help customers securely release sensitive information from its printers and MFPs. The combination of technologies creates a secure environment within which only the allocated user's fingerprint can release documents; enhancing the overall document security of an organization. Equitrac software provides customers with the tools needed to efficiently monitor, manage and recover documents.

It works in tandem with BioStore's highly secure, centralized Identity Management System, allowing a single token of identity to be used across separate applications within an organization. "MFPs are gateways to an organization’s network and if not properly secured can lead to breaches in data security that could inflict brutal implications,” explains Alan Mason, managing director, Ricoh Ireland. "The partnership with Equitrac and BioStore will allow us to deliver and support customers seeking biometric authentication systems, and those who

want to incorporate this innovative technology into new or existing Ricoh print solutions,” continued Mason. Jeroen Kamphuis, Alliance Manager, Equitrac EMEA explains that fingerprint technology is the safest possible way to identify the user. "The replacement of cards and wasted paper is also costly for schools, and by incorporating biometric technology with their printers, schools are able to oversee their document workflows more closely, manage print costs and ensure that only documents that are truly required are printed.” said Nigel Walker, director of BioStore.

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OEM News

HP opens design center for printers in Singapore

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P has opened a design center for its Imaging and Printing Group in Singapore. The first of its kind, the new design center will be responsible for the design and development of inkjet and web solutions products that will be used worldwide. With user experience at the core of the design process, the center will act as the Asia-Pacific

design hub to address the evolving needs of consumers by designing and developing appropriate products and innovations. Vyomesh Joshi, executive vice president of HP’s Imaging and Printing Group (IPG) said the opening design center in Singapore would ensure that the “design process benefits from a pan-Asian customer perspective”. The IPG Design Center will serve as the hub for all regional design activity, working with HP design teams in India and China to design and develop future product lines sold worldwide, including HP Deskjet printers, HP Photosmart printers, HP Officejet printers, HP Officejet Pro printers and HP Retail Publishing Solutions. Many of HP’s global OEM partners are

based in Asia-Pacific, so locating the design center in Singapore “helps HP to work more closely with, and manage these partners, resulting in higher quality design, execution and customer experiences”, according to the company. The HP IPG design team has a long history in designing and developing industry-leading products. One of the first products developed by the Singapore-based design team was the recently launched HP Officejet Pro line-up of Web-connected and ePrint-enabled printers for small businesses. “HP’s design philosophy is rooted in creating new user experiences. Our Singapore design team is purpose built to tap into the unique design requirements of Asia-Pacific customers and to design and develop printing solutions for customers in Asia-Pacific and around the world,” said Sean Carney, Director, Design, Imaging and Printing Group, HP.

Fuji Xerox to enter home laser printer market

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uji Xerox's printer and multifunction business has traditionally concentrated on devices aimed at mid-range and highend markets, but in a new move Fuji Xerox will focus more on the home laser printer market. James Henderson, Fuji Xerox President of printer channels, said:"We are bringing high-end technology to low-end products. We are bringing the world's best technology to everyone." However, he also acknowledged that the market was very crowded, with Hewlett-Packard and Samsung the leaders in the below $400 printer market. He added that he was confident about the selfscanning LED (SLED) printhead that simplifies the mechanism and saves space, as well as the eco-toning technology his company would introduce to customers. The SLED is so much smaller than conventional

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laser mechanisms that it frees up enough room for an additional paper tray within the same device outline. Besides the SLED, Fuji Xerox has announced that it will use its EA-Eco toner technology in its new laser printer lines. This technology reduces carbon dioxide emissions during manufacturing and use, and requires less toner powder in printing.

▲ James Henderson, Fuji Xerox President of printer channels.

Fuji Xerox has released some lower-end models such as the WorkCentre 3119 and the Phaser 3155, and it wants to invest in this market. Henderson said key features for the segment include ease of use, plug-and-play operation and networking capabilities. Fuji Xerox will compete on price as well as product. He also mentioned that the overall laser printer market was around eight million printers, with 70-80 per cent in small businesses and SOHO. He explained that despite the fierce competition, Fuji Xerox was confident about its new technology as well as its 50-year-old direct sales and six-year-old channel sales systems. According to Fuji Xerox, the company will release six new models of full-color digital multifunction device for office use on January 17, 2011: three models in the ApeosPort-IV series and three models in the DocuCentre-IV series.


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OEM News

Canon India launches exclusive brand store

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anon India has made a foray into the retail space with the launch of its exclusive brand retail store called Canon Image Square. The company plans to roll out five such stores by December 2010 and 300 stores in the next three years. The retail store covers an area of approximately 1,450 sq. ft. and is based on the franchise model. It aims to be a one-stop destination for people

with imaging needs that affords the company increased visibility and reach across the country with a view to boosting sales. Mr Kensaku Konishi, President and CEO, Canon India, said, "The first retail store launched aims at providing our customers with a one-stop shop for their digital needs that will result in satisfied and stronger customer base, thus helping our business substantially. We have had record growth of 50% in 2010

and expect to close the year at Rs 1,260 crore. In three years, the new brand retail business division will contribute 20% of our revenues.” Canon India has also introduced a new division called the Brand Retail Business Division. The division will be responsible for creating a network of franchises and maintaining a harmonious, consistent and contemporary look and feel in all stores. At present, the division employs about 12 people.

OEM expansion plans for 2011

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KI establishes printer sales office in Russia OKI Data Corporation has established a sales office in Russia. The company plans to enhance its presence in the region by reinforcing its relationship with business partners and customers and in turn, strengthen its position in the Russian printer market in fiscal year 2011. The new Russian sales office will provide competitive products, focus on delivering high quality customer service and after-sales care, developing stronger business relationships and expanding its distribution channel. Harushige Sugimoto, president of OKI, says: "The new Russian sales office represents a great opportunity to increase our presence in this important market. By offering excellent customer service and tailored solutions for businesses we can continue to demonstrate OKI's commitment to our customers whilst expanding our business in the emerging market." The company plans to achieve further expansion by enhancing its unique service offerings such as managed print services as well as support programs for dealers and partners, targeting not only existing sectors but also corporate and government markets. Dell expands China operations Dell will establish its second operations base in China's Sichuan province. The site, West Chengdu

High-Tech Park, will run manufacturing, sales and services operations to complement Dell's robust growth in the western Chinese market. Additionally, Dell will hire 500 new staff when it opens an accompanying office at its flagship Xiamen base later this year. China is massive to Dell, coming second only to the US in terms of its revenue. Between 2000 and 2010, revenues increased 11-fold, with a report in the last fiscal quarter showing that in China sales grew by 52% year-on-year. "We're planning for the future, and we're excited about our strategic investments in China that will help us better serve the region's increasing need for technology solutions and services," said Michael Dell, chairman and chief executive officer. HP projects expansion in Philippines HP and the Republic of the Philippines have signed a letter of intent to explore ways to expand HP’s presence and investments in this significant, fast-growing emerging market. HP executives hosted President Aquino III along with his senior government leaders for a tour of its Cupertino, Californina offices during the President’s US visit.

"As a global company operating in more than 170 countries, HP seeks to increase its long-term investments in strong emerging markets such as the Philippines to support its continued growth in products and services in the Asia Pacific region," said Francesco Serafini, executive vice president, Emerging Markets, HP. "The Republic of the Philippines has a vibrant economy with an educated workforce." HP, which has maintained a services operation in the Philippines since 1994, is interested in expanding this alliance to take advantage of the country’s strategic location in the Asia Pacific region, its skilled workforce, and its top-ranked academic and research institutions. The Philippine government expects to benefit from HP’s proposed additional investment in the global hub as well as the additional employment opportunities.

www.recyclingtimes.com.cn | December 2010

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2010: A year in review 2010 has been an eventfully year. In terms of the factors of MPS, rising competitiveness of China’s remanufacturing industry and economic recovery, the industry is thriving. The printer vendors are feeling the challenges posed by aftermarket printer supplies industry. There were also changes of the restructuring of OEM scenario. Several lawsuits were brought against aftermarket players this year by the OEMs in order to safeguard their “territory”. How to circumvent the OEMs’ patents and seize a bigger market share of the market is on the table of every aftermarket player’s agenda. The economic conditions continued to improve broadly throughout the world. Consumer spending showed signs of recovery thanks to the effects of such efforts as economic stimulus measures. In the United States, consumer spending grew steadily despite the unemployment rate remaining at a relatively high level and other concerns. Europe recorded growth in exports; the pace of economic recovery remained modest as financial concerns within the region were not fully eased. The Asian economies, such as China and India, along with other emerging countries, recorded stable expansion. The install base and value of worldwide hardcopy peripherals market is growing. Recycling Times conducted two lots of market research in 2010, both of which show that the growth of aftermarket printer supplies industry is flourishing. Emerging markets are also showing strength for further development. As well as Western Europe and North America, the markets of Russia, Kazakhstan, Ukraine, Brazil and India were covered during the analysis of the markets around the world. With the rosy picture of the industry, 2010 still witnessed several major patent infringement lawsuits this year. The first patent infringement case

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about toner cartridges was filed on June 28, 2010 when Canon Canon Inc., Canon U.S.A., Inc. and Canon Virginia, Inc. (collectively, “Canon" filed a complaint requesting that the USITC (United States International Trade Commission) commence an investigation pursuant to Section 337, claiming that Ninestar, its affiliates and a number of American resellers infringed two of Canon’s patents for laser printer cartridges. Canon also filed a lawsuit against the same defendants in the District Court for the Southern District of New York on the same day. On August 20, 2010, Lexmark International Inc. filed a complaint with the USITC against 24 manufacturers, importers, distributors and retailers of replacement toner cartridges, claiming they infringed 21 US patents held by Lexmark. Market players in China are adjusting their strategy and circumvent potential harm of patent infringement. Another hot topic of the year is acquisition. OEMs often have acquisition plans on their agenda, while this year aftermarket companies also saw many successful acquisitions. Clover Technologies Group Inc acquired NER Imaging Supplies division and its wholly owned printer parts subsidiary Image1 at the end of last year. In April, Print-Rite officially announced that it had acquired a major controlling stake in Shanghai based AEG Photoconductor Co. Ltd (APS) from its German parent company AEG Elekrofotografie GmbH. Also in April, Media Sciences International Inc. acquired Master Ink Company, Ltd., a China-based manufacturer of toner cartridges, inkjet printer cartridges, inkjet refill kits and patented next generation automatic ink refill systems. All of the assets and subsidies of Master Ink were bought. The majority ownership of industry titans Clover Technologies Group and West Point Products transferred to Golden Gate Capital in June. We also saw several companies going public this year. Hubei Dinglong and Shangdong New Beiyang were listed in the Second Board of China’s stock market. This is definitely good new for many companies in the aftermarket printer supplies industry that want to use public funding for R&D or their future plans. Bio-toner also cause some heated discussions during the year. Recycling Times would like to review some major events in the industry during 2010 in this issue.


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Industry updates Stock market Hubei Dinglong Chemical becomes listed company Hubei Dinglong Chemical Co., Ltd. (Dinglong Chemical) has reached surged limit several times since it was listed on the Second Board of Chinese Stock market. On February 11, Dinglong Chemical was listed on the Shenzhen stock exchange. The stock code is 300054, with the price set at 30.55 (RMB) per share. On the first day of listing, the share price is up 8.3%. Dinglong Chemical’s share price has been up for more than 80% since then. The company issued 15,000,000 shares, accounting for 25% of its total shares. (Industry Updates Issue 1) Suzhou Goldengreen Technologies IPO halted The initial public offering (IPO) of Suzhou Goldengreen Technologies Ltd. (SGT) was stopped at the Second Board level in China’s stock market. SGT was expecting to be listed on March 17. This contradicts an announcement made on Jan.22, where China Securities Regulatory Commission said that Suzhou Goldengreen Technologies Ltd. (SGT) was approved for IPO on the Second Board in China’s stock market. On February 24, the State Intellectual Property Office announced on its website that four patents concerning OPCs were all expired. The expiration of patents was due to the fact that “The annual fee is not paid as prescribed”. (Industry Updates Issue 1) Shangdong New Beiyang listed on China stock market On March 23, Shandong NQew Beiyang Information Technology Co., Ltd. (SNBC) was listed on China stock market. It started its initial public offering (IPO) on March 3. SNBC issues 38 million A shares. As of the date of 23, the share price of SNBC closed at 36.52 Yuan, and the share price had been increase for more than 60%. And it is still looking up. The raised funds will be pooled into two projects: a Special Printers and Related Products Production Base Construction Project (Annual Output of 500,000 Units) and an R&D Expansion Project. SNBC is a leading manufacturer of thermal print heads, printers, and printer mechanisms for POS, kiosk and label printing applications. (Industry Updates Issue 1) Media Sciences delisted from NASDAQ Media Sciences International, Inc. announced that its common stock would be delisted from the NASDAQ Stock Market and trading of the Company's common stock will be suspended from the NASDAQ Capital Market effective July 22, 2010. The Company's stock is being delisted because the stock's bid price is trading under the $1.00 per share minimum bid price requirement set forth in NASDAQ Marketplace Rule 5550(a)(2). Its common stock was quoted on the Pink Sheets later.

Mergers and acquisitions Print-Rite to acquire major stake in AEG Print-Rite Photoconductor Company Limited (Print-Rite) and AEG Elektrofotografie GmbH (AEG) reached an agreement where PrintRite would acquire a major controlling stake in AEG Photoconductor (Shanghai) Co. Ltd. (APS) in December 2010. NER sells Imaging Supplies division to Clover NER Data Products, Inc. announced the sale of the NER Imaging Supplies division and its wholly owned printer parts subsidiary Image1 to Clover Technologies Group Inc. in last December. The agreement would transfer all imaging activities including compatible laser toner, inkjet, narrow and wide impact ribbon production, and printer parts to Clover. Print-Rite announces acquisition of APS Print-Rite officially on April 1 announced that it had acquired a major controlling stake in Shanghai based AEG Photoconductor Co. Ltd (APS) from its German parent company AEG Elekrofotografie GmbH. All companies agreed not to disclose any further information. Following this acquisition, Print-Rite “shall be the only printing consumables manufacturer who possesses the production capabilities of all major components and parts in laser toner cartridges. This transaction brings a whole new competitive edge to Print-Rite as it is now able to have control of the complete production process of laser toner cartridges.” (Industry Updates Issue 2) Media Sciences acquires Master Ink in China Media Sciences International, Inc. entered into agreements to acquire Master Ink Company, Ltd. in late April, a China based manufacturer of toner cartridges, inkjet printer cartridges, inkjet refill kits and patented, next generation automatic ink refill systems. www.recyclingtimes.com.cn | December 2010

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Consideration for the acquisition includes $1.15 million in cash ($250,000 due at closing, the balance with accrued interest due on the second anniversary of the closing), a 10% override on Master Ink revenues until the note is repaid and one million shares of Media Sciences International common stock. (Industry Updates Issue 2) Golden Gate Acquires Clover Technologies and West Point Products The majority ownership of Clover Technologies Group and West Point Products transferred to Golden Gate Capital in June, a private equity investment firm with approximately $8.0 billion of capital. Both Clover Technologies Group and West Point Products’ management teams remain in control of their respective companies and have ongoing resources to improve their reach into their respective market channels. This venture and potential future acquisitions signal a maturation of the imaging supplies aftermarket industry that could mean more consolidation as this market continues to evolve. Future Graphics merged into parent company Future Graphics Imaging Corporation merged into its parent corporation, Mitsubishi Kagaku Imaging Corporation in July. They also launched a new website www.fgimaging.com. According to the company, the website will make customers’ searches for high quality matched systems much easier. Armor acquires Wecare4 The Armor Group signed an agreement for the acquisition of Wecare4

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in May, a European leader in the collection, manufacture and sales of remanufactured inkjet cartridges. Wecare4’s acquisition strengthens Armor’s commitment in sustainable development. Wecare4 have become one of the very rare players possessing mastery of the industrial process for all three key ranges of the new generation consumables market: laser, new-built inkjet and remanufactured inkjet cartridges. (Industry Updates Issue 3) Clover Holdings acquisition of ERS Clover Holdings Inc. announced the acquisition of Environmental Reclamation Services (ERS) in mid-November. This acquisition advances Clover’s strategy to be the leader in environmental solutions and supports the diversification and growth of its collection programs including laser and inkjet cartridges, cell phones and small electronics. Germany KMP acquires Intercopy Holding As of 25 October 2010, German KMP PrintTechnik AG has acquired 100% of Intercopy Holding GmbH in Schwalbach am Taunus/ Germany that sells consumables for copiers and multifunctional printers. This holding consists of Parts Depot GmbH in Germany, Copymix s.a.r.l. in France and Portugal as well as the manufacturing company Tekloq s.a.r.l. in Creutzwald France. KMP is now able to supply customers in France and Portugal through the Copymix logistics center near Paris. The total turnover of the new company group is approx. 80 Million Euro.


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OEM updates Financial status HP In March, HP stated that it has revised its previously announced financial results for its first fiscal quarter ended Jan. 31, 2010, following developments in litigation involving Electronic Data Systems Corporation (EDS), a company that HP acquired in August 2008. The revisions reflect an increase in the amount of the contingency reserve previously established in connection with the litigation and resulted in a negative impact on HP's first quarter net earnings of approximately $73 million, or $0.03 per diluted

benefit. Total install activity for Xerox equipment was up 17%. Revenue from services grew 3% on a pro-forma basis, including a 1 point currency benefit, and represents the company’s business process, IT and document outsourcing offerings. Xerox Corporation announced second-quarter 2010 results that include adjusted earnings per share of 24 cents and $678 million in operating cash flow. The technology segment saw a double-digit install growth in all Color segments. Also in second quarter, there were 10 products launched in key segments. The total revenue of the technology segment is $2,555 million.

share. The IPG group revenue was $6.2B, up 4% year-on-year. Supplies revenue was up 1% over the previous year and up 4% in constant currency while Commercial printer hardware units up 11% and Consumer printer hardware units up 18% respectively. Total printer hardware units shipment increased by 16%, with Color LaserJet units down 1% and Printer-based MFP units up 6%. HP’s second fiscal quarter ended April 30, 2010 were announced in May, with net revenue of $30.8 billion, up 13% from a year earlier including a favorable currency benefit of four percentage points. Imaging and Printing Group (IPG) revenue increased 8% to $6.4 billion. Supplies revenue was up 6%, while Commercial hardware revenue and Consumer hardware revenue increased 13% and 16%, respectively. Printer unit shipments increased 9%, with Commercial printer hardware units down 8% and Consumer printer hardware units up 15%.

Revenue from technology represents the sale of document systems as well as the supplies, technical service and financing of products, and was up 3% or 4% in constant currency. Xerox says that sales of entry-level printers and MFPs were up 56% in the second quarter.

Xerox Xerox announced today first-quarter 2010 results that include adjusted earnings per share of 18 cents and $375 million in operating cash flow. Total first-quarter revenue of $4.7 billion was up 33% including a 3 point currency benefit. On a pro-forma basis, with ACS in the company’s 2009 results, total revenue grew 5%. Revenue from technology, which represents the sale of document systems as well as the supplies, technical service and financing of products, was up 6% including a 3 point currency

Canon The company earned net profits of ¥56.8bn (US$611m) and JanuaryMarch net profit rose 220.2% on-year, largely thanks to a recovery in demand for printers and digital cameras. While sales volume of the Office Business Unit of color network digital MFDs increased in major regions boosted by the introduction of new products and the recovery in demand, sales volume for laser printers, which suffered flagging sales in the previous year largely due to an inventory issues, more than doubled, resulting in a substantial increase of 131%. Consequently, sales for the segment totaled ¥409.1 billion (US $4,399 million), an increase of 8.0% year on year, and operating profit increased 50.5% to ¥72.1 billion (US $775 million). April-June net profit rose 333.4% on-year to 67.6 billion yen (778 million dollars), beating estimates. The first half posted more than triple the net profit of the same period last year. Net income in the first six months was up 273.2% at 124.4 billion yen. Despite the significant effects of the strong yen, second-quarter sales for the Office Business Unit segment totaled ¥521.9 billion (US $5,931 million), growing 31.3% year on year, and ¥931.1 billion (US $10,580 million) for the six months ended June 30, 2010, an increase of 19.9%. (Market Data Issue 6) Lexmark Lexmark’s first quarter revenue of $1.04 billion increased 10% compared to the same quarter last year. First quarter revenue declined 3% sequentially from the fourth quarter of 2009. Gross profit margin was 36.9% versus 35.3% in 2009. Operating expense was $251 million compared to $259 million last year. Operating expense to revenue ratio was 24.1% compared to 27.4% last year. Operating income margin of 12.8% includes $15 million pretax for restructuring-related activities. Operating income margin in 2009 of 7.9% included $13 million for pretax restructuring-related activities. Net earnings for the quarter were $95 million, an increase of 61% compared to first quarter 2009 net earnings of $59 million.

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Lexmark announced financial results for the second quarter of 2010 in July. Second quarter GAAP revenue of $1.03 billion increased 14% compared to the same quarter last year. Second quarter Printing Solutions and Services Division (PSSD) revenue of $752 million grew 20% year to year, Imaging Solutions Division (ISD) revenue of $275 million declined 2% year to year. (Market Data Issue 6) Eastman Kodak Eastman Kodak reported first-quarter earnings from continuing operations of $119 million in April, or $0.40 per share on a diluted basis, on sales of $1.933 billion. This represents a $479 million year-over-year earnings improvement and reflects a previously announced intellectual property transaction and significantly improved operating results across all of the company’s key business segments. Eastman Kodakreported second-quarter results that reflect continued acceleration of the company’s major growth businesses in commercial and consumer inkjet, unit growth in the company’s largest digital businesses, the continued decline of its traditional business, and operational improvements. Revenue from the company’s digital commercial printing businesses grew 9% in the second quarter, including 18% growth in commercial inkjet printing. Consumer inkjet printer and ink revenue grew by 50% in the second quarter. (Market Data Issue 6) Mergers and acquisitions Xerox acquires IBS Xerox announced the acquisition of Irish Business Systems (IBS) for approximately $31 million (€ 21m) in January 20, 2010, expanding Xerox’s reach right across Ireland. IBS, with eight offices, is a managed print services provider and the largest independent supplier of digital imaging and printing solutions in Ireland. This acquisition would increase the number of people selling Xerox solutions and gain access to more than 11,000 customers across Ireland. Canon acquires Océ Canon Inc. (trading symbol CAJ) announced a public cash offer for all the shares of Océ (trading symbol OCE). Canon intends to make an offer of € 8.60 per Share (cum dividend) for 100% of the outstanding Shares of Océ, representing a premium of 70% over Océ’s closing share price of Friday 13 November 2009 and 137% to the average share price over the last 12 months, this makes the deal worth about 1.1 billion dollars.

of building a portfolio of solutions beyond hardware. (Around the World Issue 42 Recycling Times-Chinese) InfoPrint becomes wholly owned subsidiary of Ricoh InfoPrint Solutions Company announced on the first day of July that it became a wholly owned subsidiary of Ricoh Company, Ltd., bringing the three-year joint venture between IBM and Ricoh to its planned completion. InfoPrint Solutions works for enterprises and print-for-pay customers to increase revenue and reduce costs within highly complex, digital print environments. HP acquires Palm In July, HP completed its acquisition of Palm Inc. at a price of $5.70 per share of Palm common stock in cash. The combination gives HP significant headway into one of technology’s fastest-growth segments with Palm’s innovative webOS platform and family of smartphones, plus a rich portfolio of intellectual property from the smartphone pioneer. Fuji Xerox buys Upstream Print Solutions Fuji Xerox has bought out Australian managed printing services company Upstream Print Solutions for an undisclosed sum. Upstream would operate as an autonomous subsidiary of Fuji Xerox Australia and would continue to focus on managed print solutions in the small to medium business market. HP buys Fortify Software HP acquired Fortify Software, a privately held software security assurance company based in San Mateo, California. Terms of the deal were not disclosed. With the acquisition of Fortify, HP will be able to accelerate development of this technology to give clients the accuracy and prioritization they need around security vulnerabilities to build scalable enterprise application security programs. (OEM News Issue 6 Recycling Times) Global Imaging Systems acquires Georgia Duplicating Products Global Imaging Systems, a Xerox company, has acquired Georgia Duplicating Products. The acquisition furthers Global’s strategy of supporting business customers across the country with an expanding network of office technology providers. (OEM News Issue 7 Recycling Times)

Canon buys Tereck Office Solutions Canon U.S.A. acquired the assets of Tereck Office Solutions in May. Tereck a provider and servicer of copiers, printers and fax machines, became a wholly owned subsidiary of Canon U.S.A and operate as Canon Business Solutions -Tereck Inc. Lexmark acquires Perceptive Software for $280 million Lexmark International Inc. announced buying enterprise content management software company Perceptive Software Inc. for $280 million in cash in May. This deal logically extends Lexmark's long-term strategy www.recyclingtimes.com.cn | December 2010

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Market analysis Printers India printer industry beating the downturn According to International Data Corporation (IDC), the Indian printer market saw 17.8 lakh units ship (5.5 lakh inkjet AIOs, 4.5 lakh inkjet SFPs and 7.8 lakh laser printers) during Q3 2009. The current growth rate is 20% and the market is expected to continue growing at 20% except for inkjet single function devices in Q4, 2009. Major OEMs in India said Indian market experienced a healthy growth rate despite the recession and hopes to continue this growth momentum in 2010 as well. Worldwide hardcopy peripherals market returned to year-on-year growth in Q4, 2009 The worldwide hardcopy peripherals market grew 3.6% year over year with 34 million units shipped in the fourth quarter of 2009 (4Q09), according to the International Data Corporation (IDC) Worldwide Quarterly Hardcopy Peripherals Tracker released in March 2010. Driven by the continued popularity of multifunction printers (MFPs), this represents the first year-over-year gain in the market since the second quarter of 2008. Although shipment values declined 4.6% year over year to $14.3 billion in 4Q09, this was the slowest rate of decline since 3Q08. (Industry Focus Issue 39 Recycling Times-Chinese) Inkjet printers market in Russia in 2006-2009 Before the global economy fell into trouble due to the financial crisis, Russia had experienced stable growth in terms of shipments of new printers and sales of printing supplies for both laser and inkjet segments. But the growth spree ended in 2008, when the first signs of the impending crisis loomed. . The shipments in 2008 amounted to 4.5 million printers (laser and inkjet), which is -18% as compared to 2007. In 2009 (3 more weeks to go to the year's end as of the date of the last review of the study) the total number of shipped printers (laser and inkjets) in the country fell abruptly to 3.3 million units, which is -27% as compared with 2008. (Industry Focus Issue 37 Recycling TimesChinese) The market of printing devices in Kazakhstan Kazakhstan's market of printing devices used to show great results before 2008, when the growth rate would be in double digits on yearto-year basis. In 2008-2009 the market of printing devices (inkjet and laser stand-alone printers and MFPs) experienced difficulties because of the financial crisis like everywhere else in the world. In 2006 over 280 000 printers (inkjet/laser printers and MFPs both color and monochrome) were sold in the country. In 2007 the number of sold printing devices skyrocketed to over 450K units. In 2008 the sales rolled down to 248 000 and continued skidding downhill to 204

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000 units sold in 2009 (data as of December 2009). Kazakhstan has a very dynamic market of printer devices with good potential. The local market, as any other market in Eastern Europe and Central Asia, is prone to economic fluctuations at a higher extent than, say, in Central and Western Europe. The printing culture is not mature enough to keep the demand stable and growing. (Industry Focus Issue 39 Recycling Times-Chinese) EMEA hardcopy peripherals market to stabilize through 2010 The hardcopy peripherals (HCP) market in EMEA continues to stabilize and recover in the wake of the widespread negative growth experienced throughout 2009 as a direct result of the world's first truly global recession. Looking forward, total HCP shipment volume in the EMEA region is set to increase by a brisk 7.6% CAGR over the longrange forecast period (2010-2014). However, this relatively high growth rate must be seen in the context of an HCP market recovering from last year's low base of activity when overall HCP shipments contracted 15.1% from the 2008 market peak. IDC forecasts that shipment volume


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in EMEA will not reach 2008 levels until 2011, when the market is expected to total 46.8 million units. (Industry Focus Issue 39 Recycling Times-Chinese) Worldwide hardcopy peripherals market sees year-on-year growth in both units and shipment value in Q1, 2010 The worldwide hardcopy peripherals market grew 9.1% year over year with 28.7 million units shipped in the first quarter of 2010 (1Q10), according to the International Data Corporation (IDC) Worldwide Quarterly Hardcopy Peripherals Tracker. This is the second consecutive quarter of year-over-year unit growth and the first quarter since early 2008 where hardcopy peripherals shipment value ($13.8 billion) has also experienced year-over-year growth (7%). (Market Data Issue 4 Recycling Times) Worldwide hardcopy peripherals market sees year-on-year growth in both units and shipment value in Q2, 2010 The worldwide hardcopy peripherals market experienced doubledigit growth in both units and shipment value in the second quarter of 2010. According to the International Data Corporation (IDC) Worldwide Quarterly Hardcopy Peripherals Tracker, the total market grew 20% year over year in 2Q10 to 29 million units while shipment value increased 14% year over year to $13.3 billion. This is the third consecutive quarter of year-over-year unit growth and the first doubledigit growth for both units and shipment value since early 2000. (Market Data Issue 7 Recycling Times) Sizing the worldwide peripherals market: $149 billion in 2010 In total the market will be worth some $149 billion in 2010. Growth

rates have shown the “saxophone shaped” recovery typical of almost all markets in the recent recession. Figure 1 shows a comparison for the period from 2008 by quarter, complete with a forecast for the rest of 2010. At the moment we believe there will be a 3% growth from the $145 billion spending in 2009. The MPS market-though worth just $7 billion-is almost unique in being a countervailing IT business in the recession. (Market Data Issue 6 Recycling Times) US printer import and export by country in 2010 Sales of inkjet photo printers jumped 27.5% during the first 6 months of 2010, with America importing far more inkjet printers than it exports. U.S. sales of inkjet printers were up for 9 of America’s top 10 trade partners that import inkjet printers. China, Japan and Vietnam make almost 95% of imported laser printers, while Mexico is the largest export market for U.S. laser printers as of June 2010. (Market Data Issue 7 Recycling Times) Printer sales in Taiwan reach 89,528 units in Q2, 2010 Sales of SFPs (single-function printers) in Taiwan reached 89,528 units in the second quarter, both a positive year-on-year ( YoY ) and quarter-on-quarter (QoQ) increase, according to the IDC Taiwan Quarterly SFP and MFP Tracker report. Shipments of inkjet MFPs (multifunctional printers) during the period were 178,874 units, both a two-digit QoQ and YoY increase. (Industry Updates Issue 7 Recycling Times) The future of office documents A series of shifts has taken place within the office equipment market. The market is moving from single-function devices to multifunctionality, from A3 to A4, and from black & white to color. Color is very attractive as a communication tool, and speed/quality improvements have been paired with decreasing acquisition costs. At the same time, however, color adoption has been slow in many businesses. Over 30% of total survey participants report that their companies are slowly increasing their color use, but they remain concerned with cost and speed penalties. Nearly as many respondents report that color is strongly controlled within their organizations. Although the acquisition costs for color devices have come down, some lingering concerns remain. Furthermore, over half of all respondents believe that supplies costs for color devices are too high. These issues will likely need to be resolved before more businesses fully embrace color. (Market Data Issue 7 Recycling Times) Aftermarket printer supplies market The Spanish remanufacturing industry (2009-2009) Spanish remanufacturers have adapted in different ways. There was already a trend among small remanufacturers ("Mom and Pop companies) to give up cartridge production and focus on selling and distributing not only cartridges, but office products in general. This www.recyclingtimes.com.cn | December 2010

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trend has only increased during the second half of 2008. From around 800 companies actively remanufacturing five years ago, at least 150 have turned into dealers or retailers and nearly 100 have disappeared. 2009 is going to be a watershed year. In Spain remanufactured cartridges market share is still around 10%-15%, so there is still a lot of room for growth. Remanufactured color cartridges do not represent more than 8% of all remanufactured cartridges. Only those companies willing to produce quality products and a good marketing plan, highlighting the environmental and economic benefits of remanufactured cartridges will be able to turn this time of crisis into a profitable opportunity. (Industry Focus Issue 37 Recycling TimesChinese) Inkjet printer supplies market in Russia in 20062009 In Russia, the peak period of printer supplies rested on 2008, when the local economy was still in a good shape. A slight slide was observed in 2009, when the first signs of economic instability loomed. Despite the falling sales for printers, the sales of non-original ink printing supplies were just a fraction lower than in 2008, the reasoning for it being corporate customers' active switch from original supplies to alternative ones. In 2010 the slide might continue as the country will be struggling with the fluctuating economy for a number of years to come. But we do not expect the fall to continue beyond 2012. Due to the growing ink-based printers' base, sales of ink supplies will be hovering within the 14-15 million ranges per year. (Industry Focus Issue 39 Recycling Times-Chinese) The cartridge remanufacturing industry in Brazil Brazil has a giant cartridge remanufacturing industry, encompassing more than 10,000 formally registered companies within the printer and cartridge sector (there is no specific sector for cartridge remanufacturing under Brazilian working laws, at least not yet). This sector directly employs nearly 100,000 people who are getting organized in terms of creating new syndicates, and getting more engagement from the sector’s businessmen. The Brazilian industry is expected to regain the growth rate experienced before the crisis which hovered around 25-30%. (Industry Focus Issue 40 Recycling TimesChinese) Cartridge remanufacturing growth in India According to estimates, the Indian cartridge market is estimated around Rs 1,400 crore annually, growing at 30%. Off which nearly 35% is contributed by alternative supplies like compatibles and remanufactured products. Unfortunately, a large chunk of this is contributed by counterfeiters and low-quality compatibles. Genuine remanufactured brands contribute less than 10%. Re-manufacturers would be compelled to adopt the best practices which will work towards eradicating unscrupulous operators. (Industry Focus Issue 40 Recycling Times-Chinese)

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Ukraine's printer supplies market on the rise Being one of the largest markets in Eastern Europe, Ukraine's market of printers and printing supplies follows closely Russia's positive and negative growth patterns. Ukraine accounts for 70% of hardware, 20% of supplies and only 10% of service. With such a high ratio of the devices segment it goes without saying that any slight fluctuation of the economic stability gets this market to fall. These changes in the local consumer's behaviour resulted in the 6% growth of the Ukrainian market of printing supplies in terms of units in 2009 as compared to 2008 (according to IDC). But the value of the market fell to $153 million, which is by 34% lower than in 2008. This tells again about the high level of price sensitivity with the local consumer in the difficult economic conditions. (Industry Focus Issue 42 Recycling TimesChinese) Market analysis of Continuous Ink Supply Systems in Russia The analysis of the market of Continuous Ink Supply Systems (CISS) targeted CISS for use in inkjet printers, covering small formats (A4 & A3) office and home printers as well as large format devices (above A3). The Russia CISS market reached 0.203 million in 2009. In this same 2009, the market of inkjet printers grew and is believed to have reached 11 million units. With the worsening economic conditions in the region due to the financial difficulties, local consumers started exploring less expensive solutions. The devaluation of the ruble made original cartridges less affordable to consumers; more people thus sought to print less or use non-original consumables. (Contributors Issue 43 Recycling Times-Chinese) Laser cartridges OEM vs. aftermarket trends in imaging supplies-Western Europe and US markets For years, the competition between OEM and aftermarket laser supplies has been relatively stable. For example, the aftermarket has


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had rough 33% of the market for cartridges used in monochrome HP LaserJet printers for about 10 years. Lately, the OEM printer supplies market has felt some challenges as the aftermarket has gained share from several different causes including the recession, MPS and growing competition from products made in China. Customers looking for ways to cut costs and save money have looked to aftermarket alternatives in the supplies market of which there can be a number of options, at least for black and white printers. This article will consider the current dynamics in the supplies market and how the aftermarket in the United States and Western Europe can pursue and maintain customer opportunities. (Market Data Issue 4 Recycling Times) Forecast of the second half of 2010 China printer supplies Recycling Times interviewed 100 companies in China to take a snapshot of the aftermarket printer supplies industry in China. The economic recovery and the increasing shipment of worldwide hardcopy peripherals suggest a flourishing printer supplies market. From January to April, the printer consumables market in China thrived, especially for toner and toner related products. Of the 42 companies, 66.7% of them answered that their sales volume has grown. And the average growth is 26.9% over the same period of last year. 30.7% had a flat result and only 2.6% of them sold fewer products than 2009. (Market Data Issue 4 Recycling Times) Inkjet cartridges OEM vs. Aftermarket trends in imaging supplies-Western Europe and US markets Compared with the laser aftermarket, the inkjet aftermarket operates on a different dynamic due mainly to the differences in technology and customer segments. Inkjet printers either use an integrated cartridge or a tank format. In the US, integrated cartridges continue to make up the majority of the market primarily due to the dominance of HP. Lexmark supplies have seen a decline but this has been offset by the growth in Dell products. Tank-based cartridges represent a larger share of the European market than they do in the US due to the strength of Epson and Canon. In addition, the emerging brands of Brother and Kodak both use tankbased systems. Newer Lexmark models are switching to tanks and some HP printers also use tanks. (Market Data Issue 6 Recycling Times)

strong growth for the combined BRIC region, while the U.S. market is expected to remain essentially flat. By the end of the forecast period, the installed base in the BRIC region will amount to about 55% of the total installed base in the U.S. market. China will represent almost half of the BRIC installed base - by all measures, this is the largest of the four BRIC countries. The BRIC counties are very much dominated by black & white printing and are expected to remain so though the forecast period. The installed base for black & white laser printers and MFPs will account for the bulk of overall market growth. There are also many inkjet devices in the installed base, but they are primarily used for monochrome output. Ink refills are widely used to reduce the cost of inkjet printing. The barrier of widespread use of color machines is also analyzed. (Market Data Issue 8 Recycling Times) Dynamics of finished products companies in aftermarket printer supplies industry Recycling Times interviewed 208 companies during RemaxAsia Expo 2010 to see how the industry was going. In terms of the production output of the past two years, we are happy to see that most companies increased their production, especially the toner cartridge producers, 85.42% of whom raised their production while 10.42% companies remained at the same level of production. 62.07% of the companies that make inkjet cartridges and CISS products have witnessed an increased production while 20.29% of them have seen neither growth nor a drop in production scale. This survey shows that many finished product companies are running well and the market is undergoing some changes. For example, the mature markets such as North America are pushing market players away by restrictions on legal issues and are not as dynamic as before. Thriving markets such as Eastern Europe, Russia and the Middle East are becoming the new focus for many companies. (Features Issue 8 Recycling Times)

BRIC aftermarket printer supplies markets evaluation In terms of the installed base, the combined BRIC region is about one-third the size of the total U.S. market. At the same time, however, InfoTrends is projecting www.recyclingtimes.com.cn | December 2010

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Legal issues HP Against MMC, Mipo et. al On September 23, 2009, HP filed a complaint requesting that the USITC commence an investigation pursuant to section 337 and cease and desist orders to all respondents. The patents in suit are US Patent Nos. 6,959,985; 7,104,630; 6,089,687; and 6,264,301. The defendants are Zhuhai Gree Magneto-Electric Co., Ltd., InkPlusToner.com of Canoga Park, Mipo International Ltd., Mipo America, Shanghai Angel Printer Supplies Co. Ltd., SmartOne, Shenzhen Print Media Co.,

Limited of Hong Kong. HP alleged that the respondents have engaged in violations of Section 337 through the unlicensed importation into the United States, the sale for importation, and/or the sale within the United States after importation of the accused products that infringe one or more claims of United States Patent Nos. 6,234,598, 6,309,053, 6,398,347, 6,412,917, 6,481,817, and 6,402,279. HP sought a court order blocking infringement plus unspecified damages.

Ltd., Comptree, Zhuhai National Resources & Jingjie Imaging Products Co., Ltd., Tatrix International and Ourway Image Co., Ltd. According to the complaint, the asserted patents relate to specialized printing fluid containers. In particular, the inventions relate to printing fluid containers that have enhanced alignment and latching features, the ability to hold different volumes of ink, and the ability to electronically communicate with the overall printing system regarding the amount of ink remaining in the container. As of March 18, 2009, HP announced that it had reached settlement agreements with InkPlusToner, Comptree Ink, SmartOne Service and Zhuhai Gree Magneto-Electric Co., Ltd. of China. The Administrative Law Judge has entered default judgment against the remaining seven respondents. On April 1, 2010, HP announced it has reached a settlement agreement with Hong Kong based Print-Rite Holdings Ltd. relating to HP 02 inkjet cartridges. Print-Rite acknowledges that HP’s patents are valid and in effect and agreed to withdraw the products involved in the dispute from the United States and other countries having corresponding patent filings. In March, HP settled similar patent disputes with three other tech companies. HP is also working to settle a number of other complaints involving other companies that sell similar types of inkjet cartridges. On May 20, 2010, HP added an additional defendant, Asia Pacific Microsystems Inc. (APM) of Taiwan, an affiliated company of Taiwan-based UMC Group to the suit. The refiled case also adds Hewlett-Packard Development Company, a subsidiary of HP, as a plaintiff in the case.

New York Manhattanfederal court that claims that HP committed fraud, misappropriated trade secrets about Turbon’s collection of empties and competed unfairly in its dealings with Turbon. Turbon is seeking both money damages and injunctive relief.

Turbon vs HP On June 9, 2010, Turbon International filed a complaint against HP in a

Against Mipo et al. On June 25, 2010, Hewlett-Packard Company of Palo Alto, California and Hewlett-Packard Development Company, L.P. of Houston, Texas filed a complaint requesting that the USITC commence an investigation pursuant to Section 337. The complaint alleges that Mipo International Ltd. of Hong Kong; Mextec Group Inc. d/b/a Mipo America Ltd.; Shanghai Angel Printer Supplies Co. Ltd.; Shenzhen Print Media Co., Ltd.; Zhuhai National Resources & Jingjie Imaging Products Co., Ltd., Tatrix International and Ourway Image Co., Ltd. have engaged in violations of Section 337 through unlicensed importation into the US, sale for importation, and/or sale within the US after importation of certain inkjet ink supplies and components thereof that infringe one or more claims of US Patent Nos. 6,959,985 (the ‘985 patent) and 7,104,630 (the ‘630 patent).

Against Mipo et. al On March 5, 2010, HP sued Mipo Technology Limited of Hong Kong, Mipo Science & Technology Co. Ltd. of China, Mextec Group Inc. dba Mipo America Ltd. of Florida, Sinotime Technologies Inc. dba All Colors of Florida, and PTC Holdings www.recyclingtimes.com.cn | December 2010

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According to the complaint, both the ‘985 patent and the ‘630 patent generally relate to printing-fluid containers, such as ink cartridges. Complainants allege that each of the Proposed Respondents manufactures or purchases black and/ or color ink cartridges compatible with the “HP 02” product line in China and sells such cartridges for importation into the US According to the complaint, the accused “HP 02” compatible cartridges infringe several claims of both the ‘985 and ‘630 patents. Canon Canon takes on replacement toner cartridges On June 28, 2010, Canon Inc., Canon USA, Inc. and Canon Virginia, Inc. filed a complaint requesting that the USITC commence an investigation pursuant to Section 337. Canon alleges infringement of certain claims of two of its US patents, 5,903,803 and 6,128,454 which both relate to a projection on photosensitive toner cartridge drums that allow users, rather than technicians, to remove and replace the drum. In the complaint, Canon separates the Respondents into two categories. The first group is the so-called “Ninestar Respondents” which, according to Canon, are all under common ownership and control. The second group-the “Retailer Respondents”-allegedly infringe through sales of the toner cartridges manufactured by the Ninestar Respondents. (Features Issue 5 Recycling Times) Canon resolved with Polek and Copylite On July 26, 2010, USITC has voted to institute an investigation of certain toner cartridges and components thereof. The products at issue in this investigation are replaceable toner cartridges and components thereof, including photosensitive drums. Canon announced the resolution of a patent infringement lawsuit against Polek & Polek Inc., concerning certain Polek & Polek's toner bottle products and a patent infringement lawsuit against Copylite Products Corp. and Copylite Products, LLC. ("Copylite"), concerning certain Copylite toner bottle products, both sold for use in Canon copier and multifunction products (MFPs) on September 17, 2010. Lexmark against 24 companies On August 20, 2010, Lexmark International Inc. filled complaint with the USITC against 24 manufacturers, importers, distributor and retailers of replacement toner cartridge, claiming they infringed 21 US patents held by Lexmark. The complaint named defendants such as Ink Technologies, Ninestar Image, Seine Image, Ziprint Image, Inkjet Superstore, Ink Master, Virtual Imaging, Jahwa, and Print-Rite and so on. Lexmark requests the USITC to issue a permanent general exclusion order, or in the alternative, a limited exclusion order forbidding entry into the United

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States of all toner cartridges infringing the Asserted Patents, and a permanent cease-and-desist order directed to each Respondent. Lexmark also filed a patent-infringement complaint in the US District Court for the Southern District of Ohio against the same defendants. The District Court complaint contains allegations similar to those in the USITC complaint and seeks injunctive relief, monetary damages and attorneys’ fees. OEM vs Aftermarket: report from the front line To offer our readers a better general idea about the recent patent disputes between OEMs and the aftermarket industry, we specially worked out this summary of recent OEM legal activities against aftermarket manufacturers regarding patents and a summary of successful defenses against OEM patent suits. (Features Issue 7 Recycling Times) Samsung against TNIRP Samsung took legal action against South Korean chip manufacturer TNIRP accusing it of violating patents with its compatible smart chips and resetting devices. Now TNIRP is proceeding with invalidity action for the patent itself and at the same time, preparing data to refute the patent. Epson resolved with Medea Epson reached an agreement with Medea International over a long running inkjet cartridge patent infringement case, concerning two patents in the lawsuit. Medea International “agreed to withdraw the products from sale and pay an undisclosed sum towards Epson’s claim for substantial damages and legal costs” in an agreement effective on October 18, 2010. However, the Managing Director of Medea, Yusuf Okhai has made a statement that “"It is absolutely true, that we have decided not to challenge the validity and that we will withdraw the Epson compatible products. We have not ever admitted any infringement.” (Legal Issues Issue 8 Recycling Times)


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Shows & Events Remax@Paperworld 2010 Remax@Paperworld 2010 was held in hall 4.0 of the Messe Frankfurt for the first Remax event that is being held in parallel with Paperworld. Paperworld is welcoming 2,111 exhibitors from 66 countries. ReIndia Expo 2010 ReIndia Expo 2010 was held in Mumbai, India on Jan 29, 2010 in Bombay Exhibition Centre (BEC). There were 36 exhibitors. It was estimated that 1500 visitors attended the event and most of them were from the industry in India. ITEX 2010 ITEX 2010, witnessing its tenth birthday, was hosted by Imaging Network, a subsidy of Questex in Las Vegas Convention Center. There were more than 160 corporation exhibitors on the show, most of which were from America. It is estimated that there were more than 2500 visitors during the two day show, most of whom were dealers and distributors in America. Some of the visitors were from Canada, Mexico and other South American countries. CIFEX 2010: a complete success On April 23 and 24, the North China Consumables Forum and Expo (CIFEX) 2010 was held in Hebei. The event welcomed 52 exhibitors, 983 visitors and 103 delegates. During the show, a productive round-table meeting discussed the themes of increasing communication and avoiding hostile competition. Toners Conference 2010 From May 17 to May 19, the Toners Conference 2010 was held in Marina del Ray Marriott Marina del Rey, California. The three-day conference focused on toner and the toner cartridge industry. The latest technology, the emerging markets and the developments and trends for the industry as a whole were the key topics of the conference.

more than 110 exhibitors. RechargExpo 2010 From July 14 to 16, RechargExpo 2010 was held in Jakarta. The show drew about 100 exhibitors from Indonesia, Singapore, China and other regions around the world. GRIGA 2010 unveils a new era for imaging industry The charter meeting of Global Remanufacturing Industry General Assembly (GRIGA) was lit-up by inspiring speeches and discussions executed by representatives from businesses, trade associations and industry media from the four corners of the world. This inaugural event signals a new era for the imaging industry: one of international communication and collaboration. GRIGA provided a new forum for delegates from international trade associations, industry media and entrepreneurs of the world to join together and discuss common issues faced by the industry as a whole. RemaxAsia Expo 2010: reaching a new height RemaxAsia Expo 2010, held from September 26 to 28 by CCPIT Zhuhai Branch and Recycling Times Media Corporation, has concluded successfully. The show saw unprecedented growth, with a show floor of 23,000 square meters-a 51.2% increase in exhibition space over the previous year. The threeday event welcomed 360 exhibitors from 18 countries and regions as well as 8,626 visitors from 81 countries and regions. This means since its debut in 2007, RemaxAsia Expo has become the world’s largest trade event for the aftermarket printer supplies industry.

Reciclamais South American Expo 2010 Reciclamais South American Expo 2010, which was hosted by ReciclaMais Magazine. There were more than 80 companies exhibiting at the show. RechargRussia Expo 2010 RechargRussia Expo 2010 was held in Moscow on June 29-30. Over 60 companies and their partners from 9 countries took an active part in the exhibition in 2010. China alone was represented by 35 companies, Russia following with 12 companies. Germany, Turkey, Korea sent 3 companies each. Over 2200 visits were registered during the 2 expo days. World Expo 2010 On July 14 and 15, 2010, World Expo 2010, held by Recharger Magazine, had

Summary 2010 is coming to an end. I am sure most companies have ups and downs on the road. Any company aspiring to paint for itself a bright, prosperous future must continually improve itself and surpass its previous efforts. What is your most rewarding plan for 2010? Wish you all a prosperous future in 2011! www.recyclingtimes.com.cn | December 2010

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Visitor survey at RemaxAsia Expo 2010 During RemaxAsia Expo 2010, a large number of international visitors came and communicated with local and overseas exhibitors about their needs. Recycling Times interviewed 98 overseas visitors to find out how their business are doing and their future focus for development in order to get a snapshot of the current state of the industry Altogether we received 98 surveys out of 98, of which 97 of them were valid. Of these 97 visitors, 10 were from Eastern Europe (Including Kazakhstan, Poland and Russia), while 15 were from South America (including Argentina, Brazil, Chile, Mexico and Peru). Another 14 came from North America (Canada and the USA). 26 of them came from Western and Central Europe (including Britain, Germany, Italy, the Netherlands, Spain and Switzerland). Another 14 of them came from India. The other 18 came from Australia, Israel, Japan, Nigeria, Palestine, South Africa, Thailand and, Tunisia which we refer to in this article as “others” (all other regions apart from China). Since we handed out the questionnaire randomly at the exhibition hall, the visitors can be seen as a sample that represented the percentage of all the visitors at the show. Figure 1 roughly shows the percentage of visitors of RemaxAsia Expo 2010.

businesses. For mature markets such as North America and Europe, the visitors were distributors, OEMs, manufacturers, agents, empties collectors, companies that provide technology on manufacturing toner and the media. However, of the respondents from South America, the spectrum was narrower – with only distributors and manufacturers responding. We can estimate from these numbers that emerging markets have not enough support or rather that the complete chain for the industry has yet to take shape in emerging markets. Since the question was a multiple choice one, the percentage in all is larger than 100%.

▲ Figure 2 Major businesses of RemaxAsia Expo 2010 visitors

One other thing is noticeable: OEMs from India, North America, Eastern Europe and other regions of the world also took part in for RemaxAsia Expo 2010. They took up 4.0% of the total respondents. ▲ Figure 1 Overseas visitor percentage by regions

Primary business The respondents were asked what their primary business was. They could choose multiple choices from distributor, OEM, manufacturer, agent, media, retailer, research organization and others. 50.5% of the respondents were distributors and 36.4% were manufacturers. 16.2% of the respondents were also retailers. See figure 2 for detailed numbers of the respondents’ major

Purpose of visit In order to find out what the visitors’ main purpose for their visit, the respondents were asked to choose several options from getting to know the market and collect information, to look for new suppliers, to visit current suppliers, to look for investment opportunities or partners and to experience the show with a view to exhibiting next year. From figure 3, we can see that to know the market condition and collect market information was the most important reason for visiting. www.recyclingtimes.com.cn | December 2010

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â–˛ Figure 3 What is your main purpose of visit?

A significant 48.5% of overseas visitors were here to visit current suppliers, which means 48.5% of all the overseas visitors had suppliers who were the exhibitors or around Zhuhai city during the trade show. This is a very good sign for the manufacturers in the domestic industry. However, 53.6% of the overseas visitors came to the show hopping to look for new suppliers, which signifies that the competition is very fierce and the respondents were not satisfied with their current suppliers be it on price, quality or other factors. One other thing worth mentioning is the percentage of respondents (12.4%) who were looking to find investment opportunities or partners during the show. When Recycling Times was chatting with some of the visitors, we also met several people who wanted to join the industry as a remanufacturer or distributor. Judging from this, we think that the aftermarket printer supplies industry is still a thriving industry with potential in spite of patent infringement disputes and other difficulties ahead. Products sourced from China Although we know about the purposes of visiting the trade fair, we wanted to also find out what kind of products respondents sourced from China. Again, the respondents were asked to do a multiple choice question about what they were sourcing from China.

Those who were sourcing for finished products (including inkjet and toner cartridges) accounted 54.6% of the overall respondents. And the most wanted products are toner, parts and components for toner cartridges, taking up 57.5% of all the respondents. Inkjet cartridge parts and components are easier to find than those for toner cartridges. In this survey, only 28.9% respondents were sourcing ink and related products from China. This also reveals the weakness of China in terms of toner products manufacture. As China has a slightly longer period of time in making inkjet cartridges and shorter time in producing toner-related products, this is also understandable. It is a bit surprising that parts for printers and copiers were sourced from China by 38.1% of the interviewed visitors. Empties are also wanted from China. 25.8% respondents indicated they looked to buy empty cartridges from China. Following-up were paper and Ribbons (TTR), making up 23.7% and 22.7% respectively. Equipment such as refilling machines, kits and tools were also looked for by 14.4% of the respondents. The Chinese printer hunters also represented 14.4% of the respondents. For the packaging material, 9.3% of the respondents would source them from China. Services were also being sourced by the respondents (4.1%). Figure 4 gives the detailed results of this survey. If we look at how the market segments break down, all the regions except Eastern Europe have more than 50% respondents sourcing finished products from China, with the highest percentage being South America at 86.7%. However, only 10% respondents from Eastern Europe said they would source finished products from China. Given that 60% of them were distributors and only 10% Eastern Europe respondents were manufacturers, this suggests that the local distributors in Eastern Europe market supply ink, toner, parts and components for local manufacturers. That is, the manufacturers rely on the distributors for supply of parts and components and don’t import themselves.

â–˛ Figure 4 Products sourced from China by overseas visitors of RemaxAsia Expo 2010

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Market Data

▲ Figure 5 What are your main target market?

Target markets Western and Central Europe were the most mentioned target markets during the survey, with 37.1% respondents identifying these as their main target market. The second one was South America, taking 28.9% of the vote. It is worth noticing that all the respondents from South America marked South America as their target market but marked none of the other markets as target. This suggests both that South America distributors and manufacturers are committed to their local market or that they are not strong enough to explore other markets. To a certain point, this also says that the market is not mature yet and the potential is enormous since the market is set as target market by distributors and manufacturers from all the other parts of the world. South America has already been recognized as an emerging market. China was targeted by 11.3% of the overseas as main market, ranking eighth among the 10 regions we cut the world into. This may be due to the some market players have cut their prices in order to grab more market share and other form of vicious competition in China, which is not positive for the long-term development for the future of the aftermarket printer supplies industry as international players are reluctant to come into the Chinese market. Japan remains the least penetrated by international visitors for the reason that the Japanese market has relatively higher demand over quality and exclusive trends towards foreign brands. Development focus From Figure 6, we can learn the 68.0% respondents would place future development focus on compatible cartridges while 47.4% also put emphasis on remanufactured cartridges. 14.4% respondents would develop in paper, CISS, parts, providing an OEM service, empties, toner, OPC, ink and other parts and components and services (such

as MPS) that support the development of the industry. The South American respondents were more interested in compatible cartridges, with 93.3% of them hoping to exert efforts in this field in the future while only 13.3% of them would focus on

remanufacturing cartridges. Other emerging markets such as East Europe, India other and regions show the same pattern. 80% respondents from East Europe would focus on producing compatible cartridges. 69.2% of India respondents would place compatible cartridges as future emphasis and 38.5% would focus on remanufacturing cartridges. In the “other regions” market segment, 83.3% respondents saw developing compatible cartridges as their main focus. In North America and Western and Central Europe, the situation was opposite. More placed remanufactured cartridges as future focus.

▲ Figure 6 Which of the following is the main focus of future development?

Summary 97 visitors make up a relatively small sample; however, we can still see the potential of the industry and its dynamics, especially with regard to future development and their focus. It is evident that the market is feeling the competitive pressures as many players are busy looking for new suppliers and reaching out for new development. This is a general picture of the international visitors’ situation, to know more about the exhibitors’ development situation, please refer to Issue 8 of Recycling Times magazine. If you have any views about these two reports, you are welcome to contact Recycling Times’ editor at editor@ therecycler.com.cn. www.recyclingtimes.com.cn | December 2010

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OEMs continue to grow in Q3 The imaging industry has been showing outstanding growth since the beginning of 2010. Leading printer manufacturers such as Xerox, Lexmark and Canon have reported their third quarter performance and both demand and sales are up, resulting in higher profits or revenue. Recycling Times presents you with a closer look at their performance. Canon: big net profit increase For the third quarter of 2010, Canon reported net income of ¥68,195 ($811 million), an increase of 85.6% versus the third quarter of 2009, with net profit nearly doubling, up 74.1% versus third quarter 2009. Economic conditions have continued to improve broadly throughout the world. In Japan, consumer spending has shown signs of recovery, while in the United States; consumer spending has grown steadily in spite of the unemployment rate remaining at a relatively high level and other concerns. While Europe recorded growth in

exports, the pace of economic recovery remained modest as financial concerns within the region were not fully eased. The Asian economies, such as China and India, along with other emerging countries, recorded stable expansion. Within the office equipment market, demand for network digital multifunction devices (MFDs) recovered, particularly for color models. The company also reported a steady rebound in sales of laser and inkjet printers. Third quarter results by segment Within Canon’s Office Business Unit, sales of color n e t w o r ke d M F P s i n c r e a s e d 3 8 % b o o s t e d b y t h e recovery in demand for office equipment along with the introduction of new imageRUNNER ADVANCE-series products, while sales of monochrome MFPs increased 24%, reflecting the recovering market conditions. Sales of laser printers increased 61%. Canon says sales of laser printers in third quarter 2009 had been sluggish due largely to adjustment of inventory levels. In spite of

Office 3Q 2010 Actual / FY 2010 Projection (Billions of yen)

Sales

900 600 300 0

Op. Profit

3Q

150

Growth rate y/y ( ) Local currency base

+25.6%(+35.7%)

507

433

3Q09

3Q10

3Q10

0

18.5%

15.1%

59

76

3Q09

3Q10

1,000 0

( Excluding new consolidation effects )

OP ratio Growth rate y/y +30.3%

3,000

80 3Q10

(E Excluding l di new consolidation effects )

FY

+20.6%(+27.7%)

2 000 2,000

404

100 14.5% 50

(Billions of yen)

2,015 1,984 1,737

1,645

FY09 FY10 FY10 FY10

Current Previous Current projection projection Projection ( Excluding new consolidation effects )

OP ratio

750 500 250 0

229

285

December 2010 | www.recyclingtimes.com.cn

17 7% 17.7%

293

308

FY09 FY10 FY10 FY10 Previous projection

▲ Figure 1 Office Business Unit actual sales of Q3 and projection of 2010

36

+27.7%

13.9% 14.1% 14.8%

Current projection

Current Projection ( Excluding new consolidation effects )


Recycling Times Magazine

Market Data

Office (Copiers) 3Q 2010 Actual / FY 2010 Projection (Billions of yen)

800

400

Sales

Copiers

Growth rate y/y ( ) Local currency base

Others Other printing devices Color copiers Monochrome copiers

600

2,500 2 000 2,000

507

2,015 1,984 1,645

404

1,000

+9.3%(+20.1%) -2.4%(+6.7%)

3Q09

3Q10

Note: FY10 projections include effects of new consolidation in "Others."

500 0

Copier total Growth rate y/y

+3.3%(+13.2%)

3Q

FY

Color

+38%

+31%

M Monochrome

+24% 24%

+13% 13%

Total

+28%

+18%

Color ratio (Copiers)

, 1,500

200 0

Growth rate y/y (Unit base)

3Q

FY

Value base*

52%

52%

Unit base

29%

30%

*Includes consumables

+6.5%(+13.0%) -3.5%(+2.4%)

FY09 FY10 FY10

Previous Current projection projection

Copier total Growth rate y/y

+1.5%(+7.7%)

▲ Figure 2 Copier actual sales of Q3 and projection of 2010 in Office Business Unit

the effects of the strong yen, third quarter sales for the segment totaled ¥506.9 billion ($6,035 million), up 25.6% year-over-year, and were ¥1,438.0 billion ($17,119 million) for the nine months ending September 30, 2010, an increase of 21.9%. Profit increased 30.3% to ¥76.3 billion ($908 million) for the third-quarter, and increased 56.0% to ¥232.2 billion ($2,764 million) for the combined ninemonth period, mainly as a result of expanded sales and the rise in the gross profit ratio. Figure 1 shows the Office Business Unit’s actual sales and the projection for the whole year of 2010. Figure 2 reveals the sales situation with regard to copiers. The total year-on-year growth rate was 28% in quarter three. Within the Consumer Business Unit, Canon reported that sales of inkjet printers, displayed solid growth, particularly in Asia, but sales volumes decreased slightly from the level a year ago, and these were also affected by the strong yen. During the third quarter Sales of inkjet printers rose 3.3% to ¥324.8 billion ($3,866 million), and rose 10.2% to ¥979.1 billion ($11,656 million) for the first nine months of 2010. Sales volumes for new digital SLR cameras also rose. In Canon’s Industry and Others Business Unit, sales of semiconductor lithography equipment increased 31.7%

to ¥109.8 billion ($1,307 million) in the third-quarter, and rose 18.2% to ¥301.0 billion ($3,584 million) in the fits nine months of 2010. Profits in Canon's Office Equipment Business grew 30%, while Xerox Corp (XRX.N), Canon's main rival in office equipment, also beat quarterly profit estimates at the end of October signaling a rebound in companies' confidence about spending. Overall, Canon's sales grew in all geographical areas except Japan. Outlook Demand for such products as color network digital MFDs and laser printers are projected to head toward a recovery. With respect to the consumer products market, demand for inkjet printers is likely to expand gradually in response to the economic turnaround. For the full year to December 31, 2010, Canon now projects the following: • net sales of ¥3,710.0 billion ($44,167 million), a yearon-year increase of 15.6% • operating profit of ¥390.0 billion ($4,643 million), a year-on-year increase of 79.7% • net income of ¥245.0 billion ($2,917 million), a yearon-year increase of 86.1% • operating profit of 390 billion yen ($4.79 billion). www.recyclingtimes.com.cn | December 2010

37


Recycling Times Magazine

Market Data

Office (Other Printing Devices) 3Q 2010 Actual / FY 2010 Projection (Billions of yen)

800

400

Sales

2,500 2 000 2,000

507

2,015 1,984 1,645

404

200

1,000

3Q09

3Q10

Note: FY10 projections include effects of new consolidation in "Others."

FY

+26%

+47%

Monochrome

+64%

+67%

Total

+58%

+64%

Value V l base*

+10.9%(+19.4%) Unit

base

3Q

FY

41%

42%

13%

13%

*Percentage of Other Printing Devices Sales attributable to Color LP

500 0

3Q

Color

Color ratio (LP)

, 1,500 +13.5%(+24.7%)

0

LP

Growth rate y/y ( ) Local currency base

Others Other printing devices Color copiers Monochrome copiers

600

Growth rate y/y base)) ( (Unit

FY09 FY10 FY10

Previous Current projection projection

▲ Figure 3 Other printer devices sales of Q3 and projection of 2010 in Office Business Unit

Lexmark: profit rose “Lexmark’s third quarter earnings were better than expected with ongoing good revenue growth, strong earnings growth and strong cash flow,” said Paul Rooke, Lexmark president and chief executive officer. “These results were driven by our improved product lines, continued growth in managed print services, and ongoing strong growth in workgroup lasers and higher-end inkjet products,” added Rooke. The Company is primarily managed along divisional lines: the Printing Solutions and Services Division (PSSD) and the Imaging Solutions Division (ISD): Printing Solutions and Services Division (PSSD) PSSD primarily sells laser products and primarily serves business customers. Laser products can be divided into two major categories – shared workgroup products and lower-priced desktop products. Third-quarter PSSD revenue ($731 million) grew 12% year-onyear. PSSD hardware revenue grew 19% and laser unit shipments grew 5%, with over 20% growth in total workgroup lasers and laser MFPs. PSSD’s laser average unit revenue (AUR) was up 14%, driven by a positive mix shift in the percentage of workgroup products. In early October, Lexmark announced a significant expansion of its workgroup color devices with the introduction of the new Lexmark X792 family of color laser multifunction products

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December 2010 | www.recyclingtimes.com.cn

(MFPs), the Lexmark C792 family of color laser printers and the Lexmark X925 and C925 Series of A3 (11-inch x 17-inch) ledger color offerings. The color laser printers and MFPs include 12 new workgroup models, each including an e-Task color touch screen. PSSD is primarily focused on capturing profitable supplies and service annuities generated from workgroup monochrome and color laser printers and laser MFPs. Imaging Solutions Division (ISD) ISD predominantly sells inkjet products to a range of customers, including small office home office (SOHO) users, professionals and consumers who are heavy users, as well as business users who may choose inkjet products as a lowerpriced alternative or as a supplement to laser products. In certain geographical areas ISD also sells select laser products to SOHO and business users that purchase products through retail channels. The ISD revenue of $274 million declined 10% year to year, and all other GAAP revenue was $14 million, or $20 million excluding acquisition-related adjustments. ISD hardware revenue declined 15%. Strong growth in higher-end inkjets will offset the decline in low-end units, reflecting the ongoing transition of the inkjet product line. ISD unit shipments declined 28% but ISD AUR increased 17% driven by a positive shift in the percentage of higher-end inkjets in the mix. The supplies revenue grew 4% as strong growth in laser


Recycling Times Magazine

Market Data

supplies was partially offset by an ongoing decline in inkjet supplies. The introduction of new products such as Lexmark's Professional Series, including inkjet AIOs (including new Webconnected touch screen AIOs) targeted for small and medium businesses and the announcement in October 2010 of the Lexmark Genesis inkjet AIO, a unique device that extends the company’s line of inkjet AIOs by targeting professionals, small business and home office customers. The Web-connected device is equipped with sophisticated features and functionality, including the 4.3-inch capacitive color touch screen, the Platinum, Pinnacle, Interact and Vizix print technology, which uses separate ink cartridges to enable greater speed and produces high quality print output at an economical replacement cost for customers. By strengthening the Company's focus on the sale of higherend, higher page generating inkjet devices, the longer-term ISD objective is to ultimately stabilize and grow supplies revenue based on a smaller installed base of higher page generating devices. In November, Lexmark announced it was combining its two major printing operations – inkjet and laser – into a single organization to target additional sales to businesses. The combination of Lexmark’s Printing Solutions and Services Division and the Imaging Solutions Division will be named

Revenue Composition Revenue by Segment PSSD 72%

27% ISD All other ~1%

Revenue by Geography U.S.

Europe

45%

33% 22%

Other International ▲ Figure 4 Lexmark Q3 revenue by segment

Imaging Solutions and Services (ISS). It is said that Lexmark’s strategy of shifting inkjet technology upstream to high-usage business customers now offers the opportunity to simplify processes across R&D, marketing and sales teams into a single organization, Imaging Solutions and Services and the combination of the divisions will “bring more value to customers (and) more consistency to our products”, said Jerry Grasso, spokesman for Lexmark. He also said the idea behind it is that Lexmark's inkjet printers have become more and more geared toward businesses in recent years. Because lasers were already focused on that type of customer, it made sense to unify the sales, marketing, and research and development portions of the businesses. Outlook In the fourth quarter of 2010, the company currently expects low single digit revenue growth, and GAAP earnings per share to be around $0.86 to $0.96, or $1.03 to $1.13 excluding $0.17 per share for restructuring-related and acquisition-related adjustments. GAAP earnings per share in the fourth quarter of 2009 were $0.76, or $1.16 excluding $0.40 per share for restructuring-related adjustments. Xerox Xerox announced third quarter 2010 results that include adjusted earnings per share of 22 cents and $366 million in operating cash flow. Third quarter revenue of $5.4 billion was up 48%. “Building on our solid first-half results, we delivered steady revenue and earnings growth in the third quarter, keeping us on track to close the year strong,” said Ursula Burns, Xerox chairman and chief executive officer. “We’ve transformed our company into the world’s leading enterprise for business process and document management. During the third quarter alone, signings for service contracts grew 26% and pro-forma revenue from our BPO offerings was up 8%, along with 13% growth in equipment sales,” she added. Xerox’s operations cover Technology, Service and Other. We are going to focus on the Technology segment, which includes the sale of products and supplies, as well as the associated technical services and financing of those products. Segment Profit Third quarter 2010 Technology profit of $247 million showed an increase of $13 million from third quarter 2009. The increase in revenues and the lower cost and expense driven by restructuring more than offset the negative mix impact on gross profit from the increased percentage of equipment revenues. www.recyclingtimes.com.cn | December 2010

39


Recycling Times Magazine

Market Data

The Technology segment is centered on strategic product groups, which share common technology, manufacturing and product platforms. This segment includes the sale of document systems and supplies, provision of technical services and financing of products. The revenue mix was 22% for Entry, 56% for mid-range and 22% for high-end products. Entry includes A4 devices and desktop printers. midrange includes A3 devices that generally serve workgroup environments in mid to large enterprises. This includes products that fall into the market categories (Color 41+ppm <$100K and Light Production 91+ppm <$100K). High-end products include production printing and publishing systems that generally serve the graphic communications marketplace and large enterprises, which we will not cover here. Entry • 65% increase in installs of A4 black-and-white multifunction devices driven by growth across all regions. • 44% increase in installs of A4 color multifunction devices driven by strong growth across all regions. • 13% increase in installs of color printers driven by higher sales of Xerox-branded products and sales to its OEM partners. Mid-range • 22% increase in installs of mid-range black-and-white devices driven by growth in recently launched mid-range products. • 47% increase in installs of mid-range color devices primarily driven by demand for new products, such as the WorkCentre 7120/7700, and the continued strong demand for the ColorQube and the Xerox 700. Outlook Xerox now expects 2011 full-year adjusted earnings per share of $1.05 to $1.10, up from 95 cents to $1.05 per share. The company also expects free cash flow of $2.1 billion and $1 billion in available cash for 2011. Kodak: loss narrows Eastman Kodak Company reported a narrower loss for the third quarter on improved profit margins and continued operational improvements, despite a marginal fall in revenues. The third quarter sales figure was $1.758 billion, a 1% decrease on the third quarter of 2009, and the third quarter loss was $43 million, or $0.16 per share, compared with a loss of $111 million, or $0.41 per share, for the third quarter 2009. Sales in the quarter slipped 1% to $1.758 billion, which includes an unfavorable currency impact of two percentage points. Analysts expected sales of $1.61 billion. Second quarter sales were $1.57 billion. There are three groups in Kodak’s operations:

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December 2010 | www.recyclingtimes.com.cn

Consumer Digital Imaging Group, Film, Photofinishing and Entertainment Group and Graphic Communications Group (which we will not cover here). The business-unit performance is as follows: Consumer Digital Imaging Group In Consumer Digital Imaging Group third quarter sales were $670 million, up 25% from last year. Revenue from the digital businesses grew 10% in the quarter, reflecting increased demand for consumer and commercial inkjet products, packaging solutions, and workflow software and services, along with a successful non-recurring completion of intellectual property licensing agreement. Third quarter earnings from operations for the segment improved by $171 million to $82 million, up from an $89 million loss in the prior-year quarter. Film, Photofinishing and Entertainment Group Third quarter revenue from Film, Photofinishing and Entertainment Group declined 25% to $431 million versus third quarter 2009 and sales dropped 2.5% to $657 million at Graphic Communications Group. Profits from the company’s digital portfolio showed year-overyear improvement for the fourth consecutive quarter. Chairman and Chief Executive Officer Antonio M. Perez commented, “Our third quarter performance was marked by continued acceleration in our strategic digital growth businesses, positive cash generation, improved profit margins, and continued operational improvements across the company. I am particularly pleased with the performance of our core growth businessesConsumer Inkjet, Commercial Inkjet, Packaging Solutions, and Workflow Software and Services.” Outlook “Revenue growth in these businesses continues to accelerate and in the third quarter grew by a combined 23%. We also enjoyed growth in equipment unit placements, which will drive future consumable sales. All of these factors give me increased confidence that we are on track for a strong fourth quarter performance, and continued improvement as we move forward,” said Perez. For 2010, Kodak says it remains focused on three key financial goals: digital-revenue growth, earnings from operations and cash generation. Kodak continues to target total company revenues of $7.5 billion to $7.7 billion for 2010 and earnings of $275 million to $375 million. It is also forecasting a 2010 loss in the range of $50 million to $150 million, including the impact of a $102 million charge for early extinguishment of debt. Analysts expect the company to report revenues of $7.28 billion for fiscal 2010.


Welcome to RechargRussia Expo 2011, Your Pathway to the Russian Aftermarket of Printing Supplies! RechargRussia and RechargEast Magazines, well-reputed magazines specialized in the aftermarket of printing supplies in Russia and Eastern Europe, are happy to invite your company to take part in the VIIIth edition of RechargRussia Expo 2011, which will take place in Moscow, Russia, on May 18, 19, 20, 2011. The RechargRussia Expos are traditionally organized in Moscow, which hosts this exceptional and unique event for the printing industry every year. The exhibition attracts thousands of specialists from the aftermarket of imaging and printing supplies. Owner, managers, technical specialists and salesmen from Russia and CIS countries are the main visitors of the exhibition. RechargRussia Expo is the only professional event in the field of printing supplies organized in the Russian capital. Leading manufacturers and distributors of toner, inks, OPC drums, parts, remanufactured and compatibles cartridges all gather in Moscow each year to show their best products to the Russian aftermarket companies. Local distributors, resellers, rechargers come to the exhibition to get to know local and international exhibitors, get updates on market trends, start new and reinforce existing relationships and partnerships. Our experience in organizing 7 consecutive specialized exhibitions in Russia is extremely valuable and can be used by your company to its utmost profit.

Feedback from the 2010 exhibitors: Steven Yao, APEX, China: “The 2010 expo exceeded our expectations. We will surely take part in the show in 2011 and will probably choose to have a bigger booth to display all our products”. Angela Shekyls, SPEED INFOTECH

Be in Moscow on May 18 and 19, 2011, when you will have the opportunity to attend the presentations of the 20 biggest buyers of compatible and remanufactured cartridges in Russia and CIS! With the total annual purchasing power of over $250 million, these companies are the leaders in the market. Don’t miss the chance to meet them personally as they are always open to new mutually beneficial partnerships. Russian companies buy remanufactured and compatible cartridges for over $586 million* per year. (*Source: Business-Inform, Russia) Market share (%)

Holdings, Ltd., Russia/China: “The 2010 exhibition was good to our company. We met many visitors from the last year’s show. Although we didn’t get too many

Genuine supplies Compatible supplies Refills

new customers from the 2009 show, but in 2010 the prospects are looking good. This

Russia Market of Printing Supplies in 2004-2009

year there have been much fewer end users, but the number of distributors has grown. In addition, we���ve had many visitors from the far regions of Russia. We are definitely Year

interested very much in participating in the expo in 2011.” Ozlem Eris, IPM, Turkey: “In 2009 we established fruitful cooperation with

Qty, million units Qty, original cartridges Qty, non-original cartridges Qty, refills

Russia Market of Laser Printing in under 45 ppm Segment

some Russian companies. In 2010 we are expecting to make our position even stronger in this market. All this happened with the help of RechargRussia Expos. We are glad that we participated in RechargRussia Expo 2010 and we have already reserved our booth for 2011.”

Year

www.rechargrussiaexpo.com


Recycling Times Magazine

Profiles

Speed Infotech expands worldwide As Speed Infotech Holdings Limited approaches its tenth anniversary in 2011 the Recycling Times interviewed company CEO, Mr Benjamin Young, to discover just how a small trading company became one of China's top remanufacturers of inkjet and laser toner cartridges – and a leading worldwide distributor of aftermarket print consumables. “From the first day we started business we understood the importance of putting the customer first and how essential it is to introduce the company and products to as wide an audience as possible, so when customers begin the search for a supplier we are always there ready to explain why they should do business with us,” says Young. Intricacies of doing business Over the past ten years, Speed Infotech Holdings has participated in over 50 trade exhibitions in many different countries throughout the world – this experience, Young says: “Has greatly raised our knowledge and awareness of different business cultures”. He goes on to explain that, “without understanding how things get done in a market such as Russia, it would be impossible to even begin a business relationship.” Discovering just how a Shanghai-based company got to learn so much about the intricacies of doing business overseas we needed to learn more about their sales and marketing strategies. “ We seek to employ only the most experienced and knowledgeable local staff, we take good care of them and provide them with all the support they need to succeed,” Benjamin Young explained. “Relationships between people are a fundamental element of business, they cannot be ignored. Regardless of how much money you spend on advertising or marketing – ultimately a

42

December 2010 | www.recyclingtimes.com.cn

company must stand by its products and support its people in every way.” He adds, “We want our people to become the best they can be. My responsibility is to ensure we bring the right talent together so that we can remain in the top echelons of the remanufacturing business. Expanding new markets As the focus on expanding new markets is uppermost in the minds of CEOs around the world, Benjamin Young reflects on some of the successful and not so successful strategies in pursuit of market share. “As we face fierce price competition in South America we decided to play to our strengths, displaying to our customers the difference in quality and how that affects both a company reputation and profitability.” He continues, “we found many potential customers were being price-conditioned by traders to seek out the lowest offer price instead we took the view, along with other well-known manufacturers, that it was better for the market to promote the quality of the product.” Often the 'Made in China' label has a negative association applied to products. Many Chinese producers believe that fighting on price is the only way to compete in the market, meanwhile however, the consumers think very differently. Most customers are educated in the realities of business to understand it is better to buy one good product than

▲ Speed’s global network


Recycling Times Magazine

Profiles

several bad products. It saves both time and money for the client and the supplying company is able to establish a bond of trust. “Integrity in our commercial dealings and our commitment to quality has been the key to our success in new and emerging markets – we understand how difficult it is to win the business of a new customer, and how easy it is to lose a customer if the service is poor, and if the products are cheaply made, it is obvious to potential customers that such suppliers are only interested in their money and not building a strong business relationship.” External factors Aside from the supplier/customer relationship other external factors can affect the business environment. Recent developments worldwide in the treatment of waste and the resulting legislation forbidding the transport of waste products have begun to adversely affect the industry. Young commented, “meeting these new external challenges to our industry will be tough, this is true. I think the industry needs to work together to lobby governments on the value and environmental benefits our business can yield.” He further added, “a policy of protectionism in countries East or West will serve no long-term purpose, only ever shortterm benefits. Fair competition in open markets is the best solution to meeting environmental objectives and worldwide industrial growth. Legislation has an important role, but it must be a balanced approach.” Time and resources Over the past few years Speed Infotech has been investing into new technologies and infrastructure. We asked Mr.

▲ Speed products

▲ Warehouse of Speed

Young to explain some of the investment strategies. “As we discussed, each market has specific needs and requirements especially in BRIC (Brazil, Russia, India, and China) countries, so whilst pricing policies and payment terms are important they are not necessarily our, or our customers highest priority when the means of distribution, the quality standards, and the customs formalities take so much of our time and resources.” Contracts signed “We are good at what we do. Remanufacturing high-quality inkjet and laser toner cartridges is a precision job, and this is an innovation-led business we are in. Therefore, it is absolutely essential to invest in research and development.” The Shanghai factory has been recently revamped with new production lines, and contracts have been signed with several leading aftermarket parts suppliers to support the increased, and more diversified range of laser toner cartridges in production. Young explains, “Our market research and customer feedback shows continued demand for mono and color laser toner, we are tooling our factory to capitalize on this future demand, and training our personnel accordingly.” Company expansion projects Exclusively, for the Recycling Times, the Speed Infotech CEO hinted at plans to launch a new international distribution hub outside of the Chinese mainland. “We have been studying the investment opportunities in Europe and hope to release details about our company expansion projects in the coming months.” Speculation about a new warehouse facility has been reported as the most likely development, supporting increased sales volumes into European Russia and neighboring countries. www.recyclingtimes.com.cn | December 2010

43


Recycling Times Magazine

Tech Zone

Remanufacturing the Xerox Phaser 3100 Toner Cartridge By Mike Josiah and the Technical Staff at Uninet Imaging First released in April 2008 the Xerox Phaser 3100 is based on a 20ppm, 600 dpi MFP engine that has a first page out in less than 13 seconds. These machines can print, copy, fax and scan. The printers come with a starter cartridge rated for 2,000 pages and the standard cartridge (106R01379) is rated for 4,000 pages at 5% coverage. These machines use a somewhat unique method of telling the printer a new cartridge has been installed. Instead of a chip on the cartridge they use a Key card that is inserted separately into the printer (See Figure 1). These reset cards need to be replaced each cycle. When packaging the cartridge it is a good idea to tape the card to the top of the bag so the user does not forget they have to insert the card for the cartridge to work (just like the OEM does) An interesting item about this system is that the cartridge does not have a toner end detection system. It is all controlled by the reset card. These cartridges are fairly easy to do, and with a retail cost of $178.00* very profitable too! *As of February 2010 Tools needed • Toner approved vacuum.

• A small Common screw driver

• Needle nose pliers

• Size T-7 Torx driver

• A Phillips head screwdriver

Supplies needed • Dedicated Phaser 3100 Toner

• Dedicated Phaser 3100 Reset Card

• Conductive grease

• 99% pure isopropyl alcohol

• Cotton swabs

• Soft, lint free wipes

2

3

44

December 2010 | www.recyclingtimes.com.cn

Remove the Torx screws and plate from both sides of the cartridge.

step >

step >

Remove the 2 silver pins, one from each side of the cartridge. Pry them out with a small jeweler’s screwdriver and then grab them with wire cutters to remove them.

step >

1

T h e To r x s c r e w s u s e d i n t h e s e cartridges are size T-7.


Recycling Times Magazine

step > step >

Remove the two screws on the wiper blade, and the blade. Clean out the waste chamber.

step >

step >

9

On the toner hopper, note the location of all the gears.

14

Remove the four loose gears from the hopper.

Re-install the two screws and the wiper blade.

10

Remove the PCR and clean with you preferred cleaner.

step >

7

13

Install the drum axle from the hub side. Make sure the keyed end of the axle is installed first. It is easier if you mark the keyed end with a marker so you know how to orientate it when installing it. In the picture show the side marks show the orientation of the flat or keyed edge, the top one show the keyed edge location.

Clean off all the old conductive grease from the PCR contacts, and replace with new. Remember, whenever using conductive grease more is never better. Only use a small amount (Match what the OEM had there).

6

12

step >

Remove the two screws on the wiper blade, and the blade. Clean out the waste chamber. NOTE: Be very careful not to damage or distort the thin Mylar Recovery Blade next to the wiper blade. If this blade is bent or damaged in any way, it should be replaced.

5

From the gear side of the drum half, take a small punch (1/4â&#x20AC;?) or screwdriver and drive the metal axle pin out. This axle is fairly tight. Make sure you do it from the gear side, (the keyed Side), if you try and drive the axle out from the opposite side, the axle will not move and you may damage the drum ground contact inside the drum. Remove the drum.

step >

8

step >

Pry out one of the side panels, and separate the two halves.

step >

4

step >

step >

Tech Zone

11

Install the cleaned PCR.

www.recyclingtimes.com.cn | December 2010

45


Recycling Times Magazine

Tech Zone

21

15

Remove the gear from the fill plug area by pressing in on the tab.

18

step >

step >

Remove the screw, holder and contact from the contact side of the developer roller. Press in on the plastic tabs on the back side of the holder to remove it. Be careful not to lose the contact!

16

22

Remove the upper metal brace, being careful not to damage the alignment pins. The pin on the left side is normally tight so more care should be taken there.

step >

step >

step >

Remove the two screws from the doctor blade. NOTE: The doctor blade in these cartridges actually consists of three parts. An upper metal brace, the doctor blade itself which is a very thin sheet of metal and the lower metal brace. Be very careful when handling the dr. blade as it is very easily bent.

Remove the fill plug and dump out any remaining toner from the hopper.

23

20

Remove the developer roller.

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December 2010 | www.recyclingtimes.com.cn

24

Remove the lower metal brace. Lift it out from the left side as the right side has a tail that runs through the cartridge wall.

step >

step >

Pry off the metal bushings from both sides of the developer roller shaft.

17

Remove the screw and holder from the gear side of the developer roller. Press in on the plastic tabs on the back side of the holder to remove it.

step >

19

step >

step >

Remove the Dr. Blade. Lift it out from the slot on the left side of the hopper. Again, be very careful not to damage it. Clean the blade with a cotton swan and alcohol.


Recycling Times Magazine

Tech Zone

28

step >

Replace the developer roller into the cartridge. The long metal shaft side goes to the gear side of the hopper.

25

31

step >

Replace the screw, holder, and contact on the contact side of the developer roller shaft.

Replace the metal bushings on both sides of the developer roller shaft. step >

29

32

step >

step >

step >

Clean out any remaining toner from the hopper. Make sure to get the feed roller and foam seals clean. It is not necessary to remove the roller, just make sure it is clean.

33

Clean and replace the conductive grease on the developer roller and the feed roller shafts. Note that the feed roller contacts also run to the Dr. Blade. This helps ensure that the toner is properly charged throughout the hopper.

26

27

step >

Replace the upper metal brace and the two screws. Clean the developer roller with a clean lint free dry cloth. We do not recommend any chemicals be used at this time.

step >

step >

Replace the cleaned Dr. Blade assembly in the hopper. Install the lower brace first inserting the tail through the cartridge wall and under the copper contact. Install the Doctor Blade next making sure the lip is facing down and the blade fits over the alignment pins correctly.

30

Replace the screw and holder on the gear side of the developer roller shaft.

Fill the hopper with the Phaser 3100 toner. Replace the fill plug.

www.recyclingtimes.com.cn | December 2010

47


Recycling Times Magazine

Tech Zone

37

34

Replace all the gears on the hopper as shown.

Place the two halves together and install the two metal pins.

step >

step >

35

36

Install the metal plates and screws.

38

After the cartridge has been tested and bagged, tape the Key card to the top of the bag so the user will see it. This key card is installed into the printer separately from the cartridge.

step >

step >

step >

Install the drum cover if available. It needs to be taped in place. Use a brightly colored tape so the user will notice it.

Printing a test page: The simplest way to test a cartridge is to make a copy. To do this place the original face down in the feeder. Press the copy key, number of copies desired and the start key. Cleaning the scanner: If copied and transmitted pages come out with marks on the pages, but the reports are clean, the scanner is dirty. To clean the scanner, open the scanner cover. Wipe the scanner window down with a lint free cloth moistened with Isopropyl alcohol. Repetitive defect chart OPC Drum

75mm

Developer roller

50mm

PCR

29mm

Mike Josiah Mike Josiah is the East Coast Technical Director at Uninet Imaging. A global distributor of toner, OPC drums, wiper blades and other supplies. An industry veteran since 1987, Mike is a member of ASTM committee F.05, the STMC Technician Certification Committee as well as an STMC trainer. He regularly contributes articles and teaches seminars at association meetings and trade shows.

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December 2010 | www.recyclingtimes.com.cn


Trade Center “TISHINKA”, T-Modul • Moscow • Russia

Russia is a huge growing printing market:

In 2009 alone, over 6,000,000 compatible cartridges and over 34,000,000 remanufactured cartridges were sold in Russia. OEM companies managed to sell just 9,200,000 cartridges. The potential of Russia’s aftermarket of printing supplies is visible with an unarmed eye.

Is your company among the suppliers of spare parts for remanufactured cartridges or of compatible cartridges? Is your company in search of new markets? Is your company on the watch for opportunities?

Consider Russia - one of the fastest growing printing markets in the world! We can take you there:

RechargRussia Expo 2011 is your pathway to the Russia aftermarket of printing supplies! Special exhibitor’s packages: • special ad discounts in both of the RechargEast and RechargRussia Magazine; • monthly mail distribution to all our Russian database (3,000+ companies): the emails include exhibitors’ profiles and hot offers; • monthly bulletins to all exhibitors full with important information about the Russian Remanufacturing Industry as well as large local buyers of compatible finished ink and toner cartridges.

Contact our representatives for more details.

Mirena Polihronova

| support@rechargeast.com

Toby Tan

| Toby@abcolors.cn

Alisa Andreeva

| assistance@rechargrussia.com

www.rechargrussiaexpo.com



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