Toning up: the growth of the toner cartridge recycling industry can be attributed to a very effective grassroots approach to recycling.

While the traditional recycling industry, in many ways, has moved away from its image as a way for Boy Scouts to raise money, the fairly rapid development of the toner cartridge recycling industry has happened precisely because entrepreneurs have made pitches to schools, non-profits and other organizations that cartridge recycling can be a way to make money and save on some costs.

The growth has been abetted by the explosive growth in the computer and the desktop printing industry.

While this growth has generated some niche markets for many remanufacturers, refillers and commodity recyclers, in some ways the industry is only now starting to come into its own, moving from a segment of the industry that had flown under radar to one that has developed an effective marketing campaign to offer a wide range of recycling methods.

FROM THE GROUND UP. Russ Thomas, with Rethink Ink, a refiller of copier and primer cartridges, notes that the company has very successfully approached schools to build up its business.

The company, which began in Kansas City, Mo., less than 10 years ago as an experiment with the Kansas City Star newspaper and one school, has now grown to serve mote than 4,000 schools throughout the United States.

Clover Technologies Group, Marseilles, Ill., also has seen its business explode. The company, which began less than 10 years ago, has seen sales jump from $2 million fewer than five years ago to $80 million last year.

The growth in Clover Technologies' business, as well as the creation and/or growth of a host of other companies catering to this niche market, follows the trajectory of the overall computer market.

With more homeowners having home computers and printers, ink jet cartridge demand is growing.

At the same time, the business world has also readily embraced computers.

While the electronics industry has seen some rapid growth in the use of computers and peripherals, the downside to this has been the growth in the amount of obsolete electronics generated.

Many corporations, not wanting to be seen as polluters, have tried to find ways to become more "environmentally friendly," while possibly saving money on new cartridges.

The result has been impressive. From its humble origins only several years ago, ink jet refillers, reclaimers, remanufacturers and recyclers have exploded. While the companies are numerous, concerns are growing about the impact they may have on the overall printer industry.

Hewlett Packard, Palo Alto, Calif., one of original high-tech firms (the company has been in business for 65 years) and one of the companies that has most successfully incorporated the recycling mindset into its overall manufacturing process, has what it feels is a model program to become a good corporate citizen.

What the company doesn't do is refill or remanufacture ink jet cartridges, toners and other printing accessories. Rather, HP runs all the collected material through a more traditional recycling process that separates the plastics, metal and other materials into their core commodities. The separated materials are processed and recycled into other products.

While researching in order to process spent cartridges, the company found that much of the existing equipment it was using to process the cartridges was not suitable. The result was that HP ended up designing its own equipment.

Boris Elisman, vice president of marketing and sales for HP's Imaging and Printing Supplies Organization, says that the company takes a three-pronged approach to supporting the environment. As part of this approach, HP designs its products with the environment in mind. For example, the main objective, Elisman says, is to reduce the number of parts in its laser jet cartridges. "We have reduced the parts by 32 percent over the past 10 years."

Additionally, HP manufactures its cartridges with a snap-on design, making the demanufacturing process much easier.

While these front-end processes make recycling easier, HP has increased its efforts on the "take back" side.

For any company looking to crack into the market, the take-back side is essential, and manufacturers of printers and ink jet and laser jet cartridges are devising methods to have the cartridges returned for repackaging.

As competition heats up for this material, more companies are offering some type of buyback program with incentives, such as offering suppliers of spent cartridges either a discount on their next ink purchase or some type of rebate.

THROUGH THE RINGER. Depending on the model, HP recycles up to 70 percent of the print cartridge by weight. Returned cartridges are shredded and materials are separated into plastics, metals and other components (ink, foam and composite parts.)

Plastics mid metals are further refined and used to make raw materials, auto parts and HP products. The remaining materials are disposed of in an environmentally responsible manner, says Elisman.

Elisman notes that the company strictly recycles the cartridges and does not remanufacture or refill the products. "We do not do any remanufacturing of cartridges. We can't get the quality that our customers demand," he states.

While HP touts its ability to recycle cartridges and toners, other companies have staked their businesses on maneuvering between the two sides

Clover Technologies Group is one of the fastest growing companies in the service industry. In fact, the company ranked 34th in Inc. Magazine's list of the fastest-rowing companies of 2002.

Since 1997, Clover has been a leader in the design, manufacture and distribution of compatible consumable printing supplies, including laser toner and inkjet cartridges: large categories of the rapidly growing digital imaging supplies industry.

Clover's product line also includes compatible laser fax cartridges, copier toner cartridges, thermal transfer fax supplies and other consumable imaging supplies. In addition to manufacturing compatible products, Clover is a leading distributor of OEM-branded imaging supplies to leading dealers and resellers nationwide.

While the company has carved out a sizable portion of the market, it maneuvers between original equipment manufacturers and the much smaller refillers who can serve only a small, local market. Clover Technologies sells what it calls genuine parts, in addition to collecting and remanufacturing spent cartridges.

NUMBERS OF NOTE. According to the International Imaging Technology Council (I-ITC), Freehold, N.J., the worldwide monochrome toner cartridge market in 2002 was $18.2 billion. Within two years, the figure is expected to grow to $23.4 billion. For color laser cartridges, the number is expected to jump from $1.4 billion in 2002 to $2.3 billion in 2006.

The association also notes that there are an estimated 5,000 remanufacturers in the U.S. These companies, the I-ITC estimates, remanufacture about 27 million cartridges each year.

The remanufacturing of cartridges resulted in the reuse of 27 million pounds of industrial grade plastic and 73 million quarts of oil conserved, the association contends.

However, the number that jumps out the most for many remanufacturers, as well as for consumers, is that the cost of purchasing a remanufactured cartridge can be from 50 percent to 90 percent less than purchasing a cartridge from an OEM.

John Santiago, a spokesman for Clover Technologies, notes that the company has grown its cartridge recycling business by adhering to high standards.

Santiago adds that of the cartridges and toner units that come through the plant, about 95 percent of what the company gets is either reused or recycled. While some are remanufactured back into cartridges or toners, others are processed to be recycled into other products. Very little of the material collected by the company ends up being disposed of, he says.

Jim Cerkleski, president of Clover Technologies, notes that despite the fact that the company is very aggressive in its recycling and reuse approach, it continues to invest significantly in research and development.

The company invested about $1 million to improve the quality of its products, he says. "We focus on quality as opposed to prices."

As for challenges in the future, Clover feels it has positioned itself well for the future, since it has invested the time and money to meet the improving quality specifications.

One company that has made its appeal directly to many consumers has been Rethink Ink. The company began as an offshoot program championed by the Kansas City Star newspaper. Initially designed to provide bonus money to schools, the overwhelming success of the program allowed the company to expand its program to a nationwide approach.

Thomas of Rethink Ink. says that since the company began roughly five years ago, it has seen the number of schools participating in its program soar to approximately 4,000.

While schools have been loyal customers, the company also has taken inroads into the corporate world. Rethink Ink also is moving to become not only a refiller and remanufacturer of ink jet cartridges, but also an OEM.

What the company has found as an effective marketing hook is that it pays all the costs for the program. This is important, as many schools and other charitable organizations are limited with their funding. In addition to providing envelopes mid covering shipping costs, Rethink Ink also provides containers that can be put in a central location, facilitating collection.

Another benefit Rethink Ink provides is that the company can take in most types of ink cartridges.

Planet Earth is another company that looks to fit the roll of a pure remanufacturer. The company, head-quartered in California, has been in business for only about four years.

Since starting, Planet Earth has been able to develop a network of around 1,500 schools, non-profits, charitable organizations and other end sources of empty cartridges.

Sean Levi, president of Planet Earth, estimates that the company handles roughly 50,000 cartridges per month. Despite the number coming through the Planet Earth plant, Levi says that the biggest problem is getting enough empties to make the company successful.

While Planet Earth has seen a sharp jump in the number of cartridges it takes in, up until now it has focused exclusively on ink jet cartridges. However, he notes that the company is looking to add laser cartridges to the mix.

"There is a huge demand for recycled cartridges," Levi notes. The company sells its products strictly through wholesalers, and much of what it produces ends up being marketed over the Internet.

QUALITY ISSUES. While many cartridge refillers can sharply reduce die cost to consumers, questions abound over the degradation of the reused cartridges. While HP has made it a point that it recycles for commodity purposes and does not reuse the collected cartridges and toners, other companies base their businesses on reusing the collected cartridges.

Clover Technologies' Cerkleski says the company makes it a point to only reuse the collected cartridges one time. "Our standards are high. We only use OEM cartridges one time," he states.

Additionally, he adds that the company tests each and every cartridge to ensure the proper quality is met.

Levi says that his company visually inspects every cartridge to ensure that there is no damage to the product. "All cartridges get inspected and circuit tested," Levi adds.

As this small, niche segment of the recycling industry continues to blossom, the scene is becoming more of a land grab, as small, nimble companies battle with larger, well entrenched companies for the developing commodity.

RELATED ARTICLE: Proprietary or not?

Companies manufacturing printers have found that re-supplying ink and toner cartridges is an excellent source of a steady revenue stream. This has allowed many printer manufacturers to drastically cut the price of their printers, if they know they can depend on a steady stream of purchases of branded replacement cartridges.

However, a battle has been brewing for some time between printer manufacturers and the entrepreneurs who refill and resell toner cartridges. As resellers of toner cartridges have eaten into the market share of larger printer manufacturers, some printer manufacturers have moved to begin including microchips in the print cartridges that would force consumers to use only cartridges supplied by the original manufacturer.

This has pitted many of the OEMs who hope to keep their consumers from buying less expensive cartridges (and questionable quality concerns), against refillers and remanufacturers.

A lawsuit being watched carefully pits printer manufacturer Lexmark International Inc. against a South Carolina-based reseller called Static Control Components Inc. (SCC).

Lexmark alleges that SCC has illicitly maneuvered around technology Lexmark put in place to prohibit outside resellers from refilling its newest cartridges. Lexmark contends that SCC's actions violate copyright protection laws.

Resellers and their advocates say Lexmark's actions are anti-competitive, and would be similar to an auto manufacturer designing a technology that would allow only one branded formula of gasoline to work in a vehicle.

The author is senior editor and Internet editor of Recycling Today. He can be contacted at dsandoval@Recycling Today.com.