Focus on Europe report

Trade magazine for the toner and inkjet remanufacturing industry ~ making waste work
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4 - 5 June 2015 • Holiday Inn Rome Aurelia
The Recycler Live’s Focus on Europe review
In partnership with ETIRA
www.therecyclerlive.com +44 1993 899 800 events@therecycler.com
Connett & Unland GbR
Co-Sponsors
Focus on Europe
REVIEW

2 FOCUS ON EUROPE REVIEW
Headline SponsorIn partnership with
ETIRATrade magazine for the toner and inkjet remanufacturing industry ~ making waste work
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Day One
The first of the two days at the Holiday Inn
Aurelia started with a series of talks from
Static Control, the largest manufacturer
of aftermarket imaging systems and
components.
Static Control discussion
Simon Grimes, General Sales Manager for
Key Accounts, introduced the company
and its official distributor for Italy,
Automation Systems, and discussed Static
Control’s products and services for the
remanufacturing industry.
Grimes said the company continued to
invest a lot of resources into developing
chips, with the goal of creating chips that
are “more resistant to firmware changes”
through emulation methods, ensuring the
technology correctly indicates toner levels.
Giving a rundown of Static Control’s
comprehensive list of components, Grimes
said that each product is part of a “system
solution” and that it is “critical for us to
understand the OEM system so we can
produce our own”.
He also showed the company’s website,
which features technical documents, a
“regularly updated” chip finder and an e-
commerce site. The recently-launched
ColorControl minisite was also discussed as
a “great tool for customers when selling
their remanufactured products”, winning
“Innovation of the Year” from The Recycler
at Remanexpo@Paperworld 2015.
Grimes then focused delegates on the
challenge of finding customers willing to
pay “what it’s worth” for a cartridge, before
turning to upcoming opportunities. MPS
was mentioned first, as Static Control
recently partnered with FMAudit to work
on three packages: one for those unfamiliar
with MPS; the second a standard programme
already offered by FMAudit; and a third
system exclusive to Static Control, which
integrates FMAudit’s software with Static
Control’s expertise in chips. These
offerings are said to be better than the
OEMs, as the yield solutions are flexible,
Grimes noted. Extended yield was another
opportunity, because offering a higher
yield may reduce cost per page (CPP) and
create an attractive incentive to customers.
Adding copiers to your product offering
was also suggested, as this may turn a
business into a “one-stop shop” for
consumers where they can satisfy all their
printing needs at once. Grimes advised
delegates to focus on the “challenge” of
addressing “OEM technical challenges
before anyone else”, specifically HP’s Jet
Intelligence toner system, which has “set
the bar for toner usage”. The company is
also looking at industrial printing as a result
of a “direct customer request”, and it
encouraged the delegates to look at their
customer bases for ideal suppliers. The
presentation concluded with an appeal to
the audience to “please consider what we
can bring to you”.
Technical session
Grimes then handed over to Technical
Manager Tom Claessens, who gave a
workshop on how to remanufacture two
specific models of cartridges.
The first cartridge was the Lexmark
C792, and Claessens said that print defects
The Recycler Live’s
Focus on Europe review
Topics this year included how to buy a business and REACH
compliance, plus the latest market analysis for Europe and a
special focus on the Italian market. Nicholas Dawson was there
for the two days to hear the latest from the industry experts.
Static Control’s componentsTom Claessens presents the Lexmark C792 tutorial
The Holiday Inn Aurelia

ETIRA
and error messages can be resolved using
Static’s Odyssey toner range. The device
has a number of features that make it
interesting from both a technical and
remanufacturing point of view, including an
air tube, a toner level sensing system and a
flag gear. Critical elements include cleaning
both the developer roller and toner fill
plug, and Static said it could get around
patents affecting the OPC drums, offering
a “ h u g e m a r ke t p o t e n t i a l ” f o r
remanufacturers.
The second cartridge was the Samsung
CLP-680, which Claessens described as a
“very reliable” device aimed at SMEs. He
described the remanufacturing process
primarily via diagrams on Static Control’s
website, including a long table of different
chips that could be compatible with the
device depending on the geographical
area, and the cartridge’s colour and yield.
ETIRA AGM and valuing products
Following this was the ETIRA AGM, and
President Christian Wernhart opened
with an encouragement to promote
remanufactured cartridges as an “eco
product”. Secretary General Vincent Van
Dijk then took over to give an activity
report, noting the main changes regarding
OEMs starting to sue remanufacturers over
patents, while the new EU Commission has
scrapped its circular economy legislation
and is considering new laws. Van Dijk plans
to travel less in representing ETIRA, but the
association will continue to fight patents in
what may be a “collision course” with the
OEMs. Also planned is an effort to
“enhance again and refresh” the group’s
image by developing a PR package, and Van
Dijk will continue giving talks on clones.
Starting the Focus on Europe
programme itself was Static Control’s
Simon Grimes, speaking on valuing your
product. He said that cutting prices is the
natural reaction to competing with the
higher prices of OEMs, particularly in the
on-going competitive climate, but that this
damages your brand, and the customer
associates price with quality. While it is
“difficult to move away from the easy sale”,
remanufacturers need to realise that this is
not the only factor and concentrate on the
sector of the market that cares about
quality, and think about added incentives
they can offer.
OEMs enjoy a 92 percent stake in the
market, and the aftermarket needs to focus
on its eight percent and providing a “high
level of care”. Grimes added that there is
also a need to educate customers on the
need to update firmware and to dispel the
myth that a warranty will be voided if
using remanufactured cartridges. The
aftermarket needs to provide the same
products as OEMs, but with added quality,
services and support.
Impact of REACH on toner
Jan Hagemann, Managing Director of
Integral, spoke next on REACH legislation
and how it would affect the toner industry
and remanufacturers. He said that while
toner itself does not come under the
purview of REACH, it contains between
eight to 10 chemicals which do, and that by
2018 all businesses handling over one
tonne of the relevant chemicals per year
would be in scope. Hagemann further
advised that enforcement efforts will grow
in the coming years, and that Integral had
already had an inspection in France. Copies
of documents had to be sent to the
inspector beforehand, who then spent two
days on site and later compiled a
report approving the business. The
relevant governing bodies include: the
Bundesanstalt für Arbeitsschutz und
Arbeitsmedizin in Germany; the Ministère
de L‘Écologie, du Développement Durable
et de l‘Énergie in France; the Health and
Safety Executive (HSE) and the
Environment Agency (among others) in the
UK; and in Italy itself, the Ministero
della Salute.
Mergers, acquisitions and
virgin versus non-virgin
The final talk of the day was from Mark
Perry, MD of Clover Imaging, on how to buy
and sell a business. He emphasised from
the outset that the purpose of buying a
company is to enhance your business, and
so “we want companies that are doing
well”. Another key consideration is to
clarify how the company being acquired
adds to your portfolio and improves the
products and services you offer. Clover’s
acquisitions have been about “achieving
vertical integration”, having made 17
acquisitions in the imaging supplies
market, four in wireless devices and one in
Headline Sponsor
Vincent Van Dijk discusses ETIRA’s plans for the next year, alongside
Christian Wernhart and Philippe Guenin
Mark Perry of Clover ImagingIntegral’s Jan Hagemann

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7FOCUS ON EUROPE REVIEW
telecoms equipment in efforts to improve
its offerings. The strength of the acquired
company’s brand was an important factor:
however, Perry warned that if the due
diligence on a deal has become merely a
“bean-counting exercise” then that
acquisition is “dead”.
Once completed, you should take a
“business as usual” attitude, he noted, as
you will not need to radically change the
model of the acquired group if it was
previously a success. Conversely, when
considering who to sell a company to, Perry
said to target an entrepreneur rather than a
business and to find out what “drives” the
buyer, which is admittedly difficult to know
if you don’t own a company. Good things
to find out include the budget for the
current year, monthly management
financials for the previous year and any
outstanding lawsuits. He also
recommended “establishing the
mechanism for valuation rather than the
value itself” and concluded that the
crucial factor is timing, something which
“only you know”.
The sessions in the conference room
finished for the day with an open-floor
discussion of virgin versus non-virgin
cartridges, and what the barriers are to
reusing non-virgins. Perry started the
conversation, saying that the key feature in
buying empties is the range of components
that make up the cartridge and that high
yield is an important factor, while recovery
of empties often involves complicated
techniques. Simon Gilchrist of BCMY
added that the components that make up
the cartridge can be repaired and sold on,
and that it may be cheaper to
remanufacture than dispose of the
components, given the WEEE regulations.
Industry presents lifetime
achievement awards to Horst
Edelmeier and Heinz Sieg
Later in the evening there was a cocktail
reception outside by the pool, giving the
delegates a chance to relax after the day’s
events, make new contacts and catch
up on other businesses in the industry. At
7.30pm the group moved inside for a
networking dinner, which also had an
awards ceremony scheduled at the end.
KMP’s Heinz Sieg had been invited to
present OCP’s Horst Edelmeier with a
‘Lifetime Achievement award for Services
to the Remanufacturing Industry’,
unaware that Edelmeier had been tasked
with giving the same award to him. Sieg
commented on his relationship to
Edelmeier: “We never did business
together but we are friends, and maybe
that’s because of that.”
Delegate feedback
A number of people at the event were
there for the first time, including a delegate
from Dubai who said the conference had
been “amazing” and that he was hoping to
make new links in Europe, and two
delegates who had come over from
Moldova to represent Impro Group, who
likewise were hoping to network at the
event.
One of the more regular attendees said it
was always enjoyable to meet with
colleagues in the industry, particularly in a
location such as Rome.
ETIRA
The poolside cocktail reception
Horst Edelmeier and Heinz Sieg receive their
awards from David Connett
The delegates network over a five-course meal

Day Two
Day two started at 9am, with The Recycler’s
David Connett introducing the day’s
events, saying that he thought the talk on
buying and selling a business the day
before had been particularly interesting.
He noted that “the question of being
REACH compliant” is becoming
increasingly relevant to the industry, as
inspections like Integral’s are starting to
happen.
Europe - a new market
perspective
The second day started with two talks
looking at market trends within Europe.
The first was from InfoTrends’ Andrew
Carroll, who gave an outline of vertical
markets in Western Europe. His data
focused primarily on the UK, France
Germany and the USA, and he said that
these markets are mature and “no longer
offer organic growth”, although MPS is
growing slightly.
The figures presented were based on
just under 100,000 devices being
monitored across Europe, and an
additional survey of 1,000 print users for
each country. Healthcare is the number
one sector for printer use in all four
countries, while in the USA manufacturing
takes second place and in Germany finance
and education are big printer users, as is
finance in the UK. MPS penetration is
generally higher for larger companies,
achieving just shy of 40 percent entry into
the market for companies with over 250
employees.
Carroll’s main point was that the
concentration of printer use for regions
within a country differs according to each
sector. In Germany, public administration is
quite spread out across the regions, with
high intensity around Berlin, Munich and
Düsseldorf, while finance is mainly
concentrated around Munich and
Frankfurt. For France, healthcare is
concentrated in the region around Paris
and the south east, while printer use in
professional services is mostly
concentrated in Paris. The UK has a high
concentration for education around
London and the home counties (those
which surround the capital) while
manufacturing is more evenly spread out.
Office printing is predicted to remain
stable in each country, although printer use
in human health and social work is
expected to decline as departments
transition to paperless systems.
Inside the CEE region
Przemek Kowalski, Consumable Program
Manager for CEMA (Central and East
Europe, Middle East and Africa), from IDC,
gave a presentation on the consumables
market in CEE countries and Russia. He
explained that the research group has
100,000 local analysts gathering data
around Europe, with 28 percent of its
analysts based in the CEMA region, and a
total of 47 percent located in emerging
markets. Kowalski, who is based in Poland,
later told The Recycler that this was the first
time he had given this presentation. He
said that the “regulatory environment and
compliance” significantly affects the market
and that smartphones and tablets are not
having the impact some think they do, as
people still prefer to read paper. However,
the analyst also commented that the end-
user “will change with changes to the
workforce”, saying that a younger
generation is coming through that is more
aware of newer technology trends and
options.
Colour laser output in CEMA is
comparatively low, with a high percentage
of the Russian market using monochrome
laser over colour laser devices and the
lower speed segment dominating toner
output in CEE and Russia. Mono laser MFPs
account for around 50 percent of toner
output for CEMA, while toner and
monochrome printing has an 80 percent
share in the total printing market. There
has been a marked transition to low CPP
inks in inkjet, with Brother in particular
increasing its InkBenefit system’s share of
its inkjet shipments from 1.7 percent to
33.6 percent from 2013 to 2014, while
Epson’s L and M series upped their share
from 63.1 percent to 82 percent for the
same period.
Kowalski also said there is a move to
high-yield devices across the board and
that the growing popularity of clones was
taking market share away from
remanufacturers rather than OEMs.
Clover’s Mark Perry queried this claim,
which Kowalski explained was fuelled by
end-users whose only concern is the price.
He ended with a graphic showing that the
equivalent of 135 football pitches-worth of
paper had been printed in the 25 minutes
his presentation had lasted, or 23 million
pages, to illustrate the opportunities in that
region.
A focus on Italy
The next part of the conference focused on
Italy itself, with a two-part discussion of the
Italian market and current legislation.
Giovanni Ravelli, President of ARTI Italia,
the Italian remanufacturing trade
association, explained that Italy was one of
the first countries to have counterfeit
cartridges come into the market through
criminal gangs, a trend which has been
curbed thanks to the ‘CAM’ legislation,
which promotes the use of remanufactured
cartridges and will soon become a legal
requirement, although it currently is not
implemented in 95 percent of tenders.
Over three million counterfeit goods were
involved in criminal police actions between
2011 and 2014 in Milan alone, with a
further 30 million counterfeit goods
involved in civil cases. Empties collected by
private contractors fell from 5.8 million in
2012 to 4.4 million in 2014.
Another reason for optimism is the
National Action Plan (NAP) which Italy is
implementing, along with 21 other
countries within the EU, leaving just six
without one. The second part of the
presentation focused on the NAP, under
which there is a minimum environmental
criteria which aims to “promote the goal of
environmental policy to develop the
recovery of materials” and “address the
ETIRA
Przemek Kowalski from IDC
InfoTrends’ Andrew Carroll

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problem of unfair competition” from
clones and counterfeit cartridges. The
legislation also promotes the idea that
price is not everything and that clones are
not the best option. It also promotes ISO
and Nordic Ecolabelling standards to
ensure traceability and proper handling of
hazardous chemicals.
The true cost of a cartridge
There was then a short coffee break for the
delegates, and then the final round of
presentations began, with Delacamp’s
Volker Kappius speaking on the costs of
toner cartridge production. He said that
the market has matured for both the
aftermarket and OEMs, as demand is no
longer outgrowing supply, while the
development of MPS and mobile and cloud
technology is reducing printing volume. It
is important, therefore, to have “intelligent
control” over the supply chain, from the
basic logistics to the service that the end-
user receives. Those within the industry
should also ask what suppliers have to offer
them, and find out whether the supplier
provides a service should the customer
have a problem with the product. Kappius
suggested a number of other questions
that need to be addressed in determining
the cost of remanufacturing a cartridge:
how much toner is needed to meet the
desired yield; do my components match
the desired yield; and which type of toner
offers the best solution to meet this need?
Remanufacturers should also consider how
well the OPC and toner system will work
with the used OEM parts (i.e. the blades
and roller).
He also said that OEMs naturally offer
the best product in terms of components,
using a matched system of parts, that the
remanufacturer ought to emulate as
closely as possible. The re-engineered
combination of parts may increase wear on
the printer, and he warned that non-
chemical toner can build up on the fuser
sleeve if not manufactured carefully.
Meanwhile, MPS providers need to focus
on their CPP and how this is affected by the
fuser unit, transfer belt and other parts,
and what their respective costs amount to.
Most remanufacturers, he claimed, only
factor in the “lower” costs of the cartridge,
forgetting other factors such as after-sales
services and repairs and whether or not the
product’s quality limits the target group.
He concluded that while there will always
be a sizable portion of cartridge buyers that
do not purchase from remanufacturers,
almost 50 percent of consumers are simply
ignorant of the remanufactured
proposition. Kappius also said that Chinese
cartridges can always undercut on price, so
competing purely on these grounds is not
the way forward.
The “R” word
The penultimate talk was from Mark
Dawson from Clover Imaging, taking a
session to ‘refocus’ the group on the
remanufacturing vision. He defined
remanufacturing as being about returning a
product to the market within warranty and
with the same quality as a new-build. He
mentioned the positive ‘r’ words of
remanufacturing, recycling, re-engineering
etcetera, but challenged the delegates to
ask “are we getting that message across”?
Educating customers is essential, he added,
and needs to be extended to encouraging
suppliers to do the same, as
remanufacturing is part of the solution to
the problem of overconsumption that is
facing humanity.
Furthermore, remanufacturing is “the
ultimate form of recycling”, Dawson
commented, as the raw materials are
turned into a useful item again using a
minimal amount of energy, and there is a
“renaissance” for remanufacturing to come.
The aftermarket needs “healthy, profitable
OEMs” to provide empties to work with,
while the OEMs in turn need cartridge
remanufacturers “more than ever”, with
the latter’s comparatively strong green
credentials and potential for innovations
and new product development. He stated
that the industry also needs strong
salespeople to “maximise our value
proposition” and not just sell based on
price savings alone. Price discounters need
to understand how slashing prices also has
long-term effects on margin, with a 20
percent discount requiring a 212 percent
increase in sales to achieve the same cash
margin.
He ended with statistics saying that
10,744,000 barrels of oil were being saved
in energy a year by remanufacturing
processes, the equivalent of a year’s output
from five nuclear power plants. In response
to Dawson’s presentation, ETIRA President
Christian Wernhart mentioned that there
are a number of IP cases coming up where
OEMs are fighting against remanufacturers.
Dawson added that it is not just
remanufacturers who are being taken to
court, but other OEMs as well.
It’s not about the price
Finally, Juan Alvite from Nubeprint spoke
on the reality of the MPS market and gave
an overview of his business’ model. He said
that the problem with providers is that they
are still very much “in the nineties” as a
market, and recommended providers be
like an aeroplane pilot, and make decisions
independent of incoming data about the
current situation of the vehicle - similar to
how MPS providers must be proactive and
anticipate their customers’ needs and
provide solutions accordingly. OEMs are
traditionally tied with MPS, which provides
an angle for remanufacturers as they can
offer solutions with the “free” benefits of
being environmentally friendly and more
adaptive to customer needs, being “brand-
agnostic” in their approach.
Alvite demonstrated Nubeprint’s website
and how it provides up-to-date information
on pages printed from each device in a
fleet; how much ink/toner each device has
left; and any problems that need to be
fixed. Returning to the aeroplane
comparison, he reminded delegates that
the quality of service is what makes the
difference, and the MPS provider must
ensure their customers receive this.
ETIRA
Juan Alvite from Nubeprint
Clover’s Mark Dawson R

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