Associating For Mutual Benefit

It is a well know fact that in order to make their role stronger among the
channel fraternity, IT associations in India are getting more organized and
structured and are devising proper guidelines and plans that will help their
business grow in the given market. Big names in the IT fraternity have formed
committees and sub-committees to take care of issues like channel verification,
event management, cultural and social welfare, and so on.

In what could best be described as an inspiration from there, cartridge
remanufacturers and recyclers across India have come together and formed the
Indian Cartridge Remanufac­turers and Recyclers Association (ICRRA). Registered
on June 14, 2007 in Bangalore, the associa­tion hopes to promote the printer
cartridge remanufac­turing industry in the country. Having begun operations in
Bangalore, ICRRA opened its Chennai office in September last year to scale up
its operations further.

How ICCRA works

The general management and control of the ICRRA is vested in the Executive
Council. The Executive Council holds office for a period of two years with the
President as its head. The VP, in the absence of the President is vested with
the authority to perform the duties of the President. The Secretariat headed by
the Executive Director is responsible for ICRRA's adminis­trative business.
Headquartered in Bangalore, the Secretariat works full time to support the
Executive Council.

Various committees are being formed both at national and regional levels,
which would comprise top and middle management of member companies, to take up
long and short-term issues of the Indian remanufacturing industry.

Besides promoting the use of remanufactured/aftermarket cartridges in India,
ICRRA also wants to get into international alliances to promote quality
consciousness in the remanufacturing industry. Another aim of the association is
to provide printer users with quality products that are cost effective
environmentally friendly alternatives to expensive imported printer
manufacturers' OEM toner cartridges.

Said Deepak M Jalihal, General Secretary, ICRRA, “There is a need to educate
partners as well as customers on the benefits of using refilled and recycled
cartridges. The association would work with various printer vendors and see how
customer education can be brought about.”

From ICCRA to CRTAI

In a related move, shortly after the formation of ICRRA, recyclers and
traders of cartridges in the western India decided to form the Cartridge
Recyclers and Traders Association of India (CRTAI).

Sharing details about the association, Shashank Ruiwale, Chairman, CRTAI
said, “With developments happening continuously in cartridges and related
products, we felt that coming together would help us and partners to impart
knowledge about good quality refill techniques at cheaper rates.”

According to Navin Pansari, Secretary, CRTAI, the association will guide
partners dealing in cartridge and related products on legal matters about the
business - like patents and IPR issues. “We will also help our partners to make
quality products with low investments. With companies like Cartridge World
entering the Indian market we need to focus on offering quality at affordable
prices,” he said.

Recently the association held a technical seminar in Mumbai where it invited
remanufacturer to understand more about the technology that goes into making a
compatible cartridge.

Remanufacturing market

Statistics indicate that the printer cartridge remanufac­turing and
recycling industry in India is an almost Rs 864 crore business with over 300
organized remanufactures and maybe at least 40,000 small businesses selling to
and servicing end users. Companies like Cartridge­World however peg it at around
Rs 2,500 crore business.

Worldwide, cartridge remanu­­­­fa­­cturing is an established industry with
players like Xerox, IBM, NCR, Staples, Wal-Mart, Cartridge World etc, holding
approximately 30 percent stake in the market. They offer remanufactured
cartridges for low costs under their brand name with 100 percent OEM quality.

In fact given the growth opportunities, Cartridge World has planned rapid
expansion in India and hopes to open about 10 outlets across the country.

The ink and toner market size in India is estimated to be over $300 million
and is growing at a rate of over 20 percent. The digital imaging supplies
industry is over a $101 billion globally. Out of which, 65 percent is ink and
toner and the balance is paper and other consumables. In India, the estimates
for the toner and ink cartridges put together would roughly be around 2,500
crore and this is growing at about 30 percent YoY.

Need for an association

The printer cartridge remanufacturing and recycling industry is largely
unorganized and fragmented at present. The need of the hour is for the
re-manufacturers to build up the infrastructure because any organized set up is
better as long as it has quality manufacturers who have large investments and
commitments for the future.

According to Jayant Gundewar, Chief Strategy Officer, Wep Peripherals, “I
think India will catch up with the worldwide ratio of 70-30 when it comes to OEM
versus remanufactures over the next 2-3 years. There are big brands involved in
this business globally. It gives the consumers a choice but its important to
verify the quality of such products.”

Gudewar further added, “The rapid growth of this business will affect only
those printer vendors who charge exorbitant prices for their consumables and try
to lock their customers under warranty clauses. Interestingly you will find that
the price per ml of ink is more expensive than liquid gold for so called genuine
ink cartridges.”

Agreeing with him, Puneet Datta, Senior Manager-Marketing, Canon India said,
“When we talk of recycling we must keep in mind that there are two categories
here. One, where original ink and toner are used for refilling; and another
category where compatible inks and toners are used for refilling cartridges.
While the quality of these products are by far superior in countries outside
India, the cartridges that are refilled with compatible products in India cannot
really boast of high quality. Given that situation it remains to be seen how
these recyclers associations would work to ensure that customers get quality
products.”

He further added, “As far as the environment part is concerned, most OEMs
sewwwll and manufacture RoHS compliant products so I feel that the driver of the
remanufacturing industry is more the margins from the trade rather than
environment benefit.”

Sharing his thoughts, S Ram Prasad, Head of Consumer Product Division, Epson
India said, “We hope that Indian consumers get wise and don't encourage the
growth of non-genuine cartridge manufac­turers. Non-genuine consumable
manufacturers are providing inferior products to the consumer with the bait of
low prices.”

He further argued that if one were to look in terms of the cost versus
benefit equation, most original cartridge vendors have taken initiatives to
ensure that a customer actually gains by buying genuine consumables rather than
non-genuine ones. He felt that the growth of recyclers would not affect printer
vendors in any way because both will target the same customers.

At the end of the day, consumers will go for best quality, price and
performance. So if recyclers need to grow well, it is time that they look a
little more closely at quality and ensure the same.

SUBBALAKSHMI BM


(subbalakshmibm@cybermedia.co.in)