SERVICE AREAS: PRIMARY RESEARCH US CARTRIDGE COLLECTION AND RECYCLING REPORT 2018
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1 SERVICE AREAS: PRIMARY RESEARCH US CARTRIDGE COLLECTION AND RECYCLING REPORT 2018 JANUARY 2018
2 cntents PRIMARY RESEARCH US Cartridge Cllectin and Recycling Reprt 2018 Dcument Executive Summary...2 Glssary...2 Key Findings...3 Newly Built Cmpatible Findings...4 Remanufacturer findings...5 What happens t cartridges that remanufacturers cllect but can t use r sell?...5 Unusable Remanufactured cartridge cllectins...6 Tables Table 1: What happens t cartridges that remanufacturers cllect but can t use r sell?...5 Table 2: Unusable remanufactured cartridge cllectins...6 P1 Keypint Intelligence
3 US Cartridge Cllectin and Recycling Reprt 2018 Executive Summary This reprt presents the results f a research prgram by InfTrends t investigate cartridge cllectins, usage and dispsal practices fr remanufactured and newly built cmpatible ink and tner cartridges. InfTrends interviewed 15 industry participants including remanufacturers, newly built cmpatible suppliers, cartridge empties cllectrs and channel members t understand the current situatin. The fllwing is a glssary f terms used in this reprt. Glssary Empties cllectr: A cmpany that buys and sells empty cartridges. A captive empties cllectr is wned by a remanufacturer. They are a prfit center t the parent cmpany and will supply primarily t the parent cmpany as well as the aftermarket when excess empties are n hand. Independent empties cllectrs are an independent business and serve the remanufacturing industry verall. New Build Cmpatible (NBC): A 3 rd party replacement cartridge that des nt use an empty cartridge frm an OEM, but rather uses a newly mulded cartridge shell and internal parts. Clne: NBC that vilated patents Empty: A used cartridge that might be suitable fr re-use r recycling. Extra - Wrng Vendr: Cartridges frm vendrs that the remanufacturers d nt accept Final Dispsitin: What happens t a cartridge at the end f its life (sent t landfill, recycled, waste t energy (W2E)) Landfill: Use f municipal waste. Municipal slid waste is cmmnly knwn as trash r garbage (US), refuse r rubbish (UK) is a type f waste cnsisting f everyday items that are discarded by the public. Depending n lcal laws, trash r rubbish may be buried untreated r may first be incinerated befre the ashes are dispsed f based n lcal laws. Nn-Virgin Empty: An empty cartridge that has previusly been remanufactured Bad Nn-Virgin Empty: A nn-virgin empty that cannt be successfully remanufactured r ne fr which there is n market. Gd nn-virgin Empty: A nn-virgin empty that can successfully be remanufactured. P2 Keypint Intelligence
4 US Cartridge Cllectin and Recycling Reprt 2018 Recycling: Crushing r melting cmpnents fr use in ther prducts r industries. Remanufacturing Recycling Rati: Share f remanufactured cartridge waste that is recycled rather than sent t a landfill r incineratr. Remanufacturing: The practice f cleaning, servicing, refilling, and re-using cartridges. Virgin Empty: An empty cartridge that has nt been remanufactured. Bad Virgin Empty: A virgin empty that cannt be remanufactured r ne fr which there is n market. Gd Virgin Empty: A virgin empty that can successfully be remanufactured. Key Findings US Supreme Curt ruling verturning Jazz Pht has had limited impact n cllectins and cartridge availability Remanufactures wh tracked cllectins t cmply with Jazz pht need nt incur that cst any mre In the past 2 year Cann was nt seen as enfrcing Jazz pht s Chinese prducers stpped wrrying abut using US cllected empties even befre the Supreme Curt ruling Chinese remans might have increased share but it is difficult t gauge as many NBC cartridges frm china are mislabeled as reman Mst Chinese prduct fr use in HP are said t be NBCs Availability f virgin empties may have lsened but they were already largely plentiful Dmestic remans remanufacturing f their wn cartridges has slightly declined Empty OEM cartridges are plentiful and inexpensive Remanufacturing a nn-virgin is fcused n very ld mdel cartridges, newest mdels and sme high vlume mdels Dmestic remanufacturers wn internal waste recycling rati has increased due t cnslidatin Dmestic remanufacturers (Including thse wh manufacture in Mexic) cntinue t cnslidate. Clver has gained additinal share. LMI has nt recvered frm plant fire P3 Keypint Intelligence
5 US Cartridge Cllectin and Recycling Reprt 2018 Dmestic remanufacturers believe that they are lsing share t NBCs Hwever B t B channels and especially thse that prvide service/cntract sales/mps are still largely aviding NBCs At this time the research fund n significant NBC supplier that prvides an end f life prgram fr custmers NBC manufactures d nt take back their empties Remans d nt want NBCs and attempt t avid cllecting them Respndents are very unsure the mix f Reman vs NBC cming rm China (fr use in HP) but mst think that at least 65% are NBC Respndents believe that a large vlume f thse remans d nt use US cllected empties Newly Built Cmpatible Findings In speaking with the industry it is clear that almst all newly built cmpatible cartridges end up being thrwn ut by the users. With ne small exceptin there is n effrt by the manufacturers f NBCs t cllect and recycle these cartridges at end f life. Other than the ne exceptin, any cllectins f NBCs are unintended and accidental cllectins by the remanufacturing industry. Remanufacturers will nt remanufacture an NBC due t cncerns abut patents as well as cncerns abut the quality and reliability f such a prduct. Remanufacturers attempt t minimize this unintended cllectin but when it des happen the waste materials are recycled, sent t waste t energy r landfilled thrugh the same prcess that the remanufacturer has fr all f its waste and s the ratis fr landfill., NBC suppliers d nt take back their empties All f the data in the table abve is fr what happens t NBCs when remanufacturers accidently cllect them Cllectin f NBCs by remans (and OEMs) is unintended and accidental Remans will nt reman a NBC because f IP fears as well as quality/reliability issues. Remans/Cllectrs state that empty NBCs are nt a huge prblem fr cllectins because mst are purchased n the internet and thse users are nt typically where they fcus their cllectins effrts. Their cllectins are primarily dne in cperatin with their wn channel partners. Recycling f NBCs is nly by remans (and OEMs) wh accidently cllect and send waste thrugh their usual prcess P4 Keypint Intelligence
6 US Cartridge Cllectin and Recycling Reprt 2018 Remanufacturer findings What happens t cartridges that remanufacturers cllect but can t use r sell? Remanufacturers need t cllect empty cartridges t remanufacture them and nt all cllected cartridges are suitable fr use. The table abve prvides ur estimates n what the remanufacturing industry des with cartridges and cmpnents that they cannt use r sell. Huge imprvements have been made acrss the dmestic reman industry t reduce the amunt f prduct that is dispsed in a landfill Large dmestic remans already largely avid landfill and the large dmestics are cnslidating the market Chinese remans still largely d nt cllect their wn remans at all Cllected waste is still a small prprtin f all cartridges that g t landfill. Mt landfilled cartridges are thse that are never recllected Recent increase in recycling rati is due t nging cnslidatin in the dmestic reman industry under nly a few very large remanufacturers wh d recycle their waste Ink Cartridges have mre share f mass that is nt easily recycled. (residual ink, spnges) Sustainability is als a selling pint in bth regins, but mre s in WE Table 1: What happens t cartridges that remanufacturers cllect but can t use r sell? Laser 2018 Landfill 40% Waste-t- Energy/ Incineratin 12% Recycled 48% Ttal 100% Inkjet Landfill 25% Waste-t- Energy/ Incineratin 15% P5 Keypint Intelligence
7 US Cartridge Cllectin and Recycling Reprt 2018 Recycled 60% Ttal 100% Fr ntes belw charts/images use the Cmments style Unusable Remanufactured cartridge cllectins Remanufacturers need t cllect mre cartridges than they can actually use because sme cllectins are damaged r unusable because they are previusly remanufactured cartridge frm a different remanufacturer, an NBC that will nt cllect r f a type f cartridge that simply is nt remanufactured. Virgin empties have a lwer defect rate than nn-virgins but remanufacturers primarily remanufacture virgin cartridges as ppsed t nn-virgins s virgin represent a higher share f ttal bad cllectins than nn-virgins. Remanufacturers als accidentally cllect cartridges that are simply nt usable because they may be NBCs, simple tner cassettes and even tner bttles that they typically d nt remanufacture. On the inkjet side a significant vlume f cllectins are bad-wrng vendr because many are ink tanks frm vendrs where the cartridges are nt remanufactured. Hwever thse number had been higher as there is mre remanufacturing n ink tanks nw than in the past. NBC s have been gaining share amng 3 rd party prduct hwever they are largely cnfined t the internet and users wh buy that way. Remanufacturers d nt cllect empty cartridges backwards thrugh the traditinal sales channels such as cntract statiners and MPS prviders. As such the impact f empty NBCs in the market has been limited. There has been little change since 2016 f the prbability that a cllected virgin r nn-virgin will be Bad Changes abve mainly reflect the changing use f nn-virgins verall Mix f bad Virgin vs Bad Nn-Virgin driven by result f mix f verall use f virgin vs nnvirgin + the success rate fr each. Table 2: Unusable remanufactured cartridge cllectins 2018 Laser Bad Virgins 8% P6 Keypint Intelligence
8 US Cartridge Cllectin and Recycling Reprt 2018 Bad Nn-Virgins 4% Subttal 12% Bad Wrng Vendr 9% Ttal 21% Inkjet Bad Virgins 9% Bad Nn-Virgins 3% Subttal 12% Bad Wrng Vendr 23% Ttal 35% P7 Keypint Intelligence
9 authrs PRIMARY RESEARCH US Cartridge Cllectin and Recycling Reprt 2018 Jhn Shane Directr jhn.shane@keypintintelligence.cm Jhn Shane is a leading industry expert n marking materials such as tner, OPC, inkjet ink, and cartridges. As a Directr fr the Cmmunicatin Supplies Cnsulting Service, Mr. Shane is respnsible fr all frecasts, research reprts, cnsulting, and client care cncerning thse tpics. He is a well-knwn authrity n all-in-ne tner cartridges, the cartridge recycling industry, and the wrld tner industry. In additin, he has cnducted extensive research fllwing similar trends related t inkjet cartridges, refills, and cmpatibles. Having cnsulted n these markets since 1988, Mr. Shane is a frequent expert presenter at industry cnferences and trade events. Prir t jining InfTrends, Mr. Shane spent seven years at BIS Strategic Decisins, where he served as an Analyst as well as Directr f the cmpany's Hard Cpy Supplies Service. He als served as a Cnsultant fr Internatinal Data Crp. (IDC) and a Site Manager f a cnsumer research center within the U.S. Testing Cmpany. Mr. Shane hlds a B.A. Degree in Marketing and an M.B.A. Degree frm the University f Massachusetts at Amherst. This material is prepared specifically fr clients f InfTrends, Inc. The pinins expressed represent ur interpretatin and analysis f infrmatin generally available t the public r released by respnsible individuals in the subject cmpanies. We believe that the surces f infrmatin n which ur material is based are reliable and we have applied ur best prfessinal judgment t the data btained. P8 Keypint Intelligence
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