|
Beyond Cartridges: A New
Profit Center for Rechargers?
Art Diamond, President, Diamond Research Corporation
OUTSIDE THE BOX
The outlook for cartridge rechargers is getting gloomy. Profits from
black toner cartridges are growing thinner as the cost of oil drives
toner prices upward. Competition is getting fiercer as OEMs adjust their
prices downward, become more aggressive in enforcing their intellectual
property (IP) rights, and develop more complex, encrypted chips. Kodak’s
reduction of the price of ink jet ink (by 50%) is another threat to the
refillers.
It seems to me that rechargers around the world would welcome another
profit center that is compatible with their current business operations.
Therefore, this article is being written as the first in a series to
expand the recharging operation into one that will be capable of mining
cash from a mountain of ink jet ink cartridges, unwanted CDs, DVDs,
toner cartridges, and cell phones.
Remember the R&R trade shows that we produced in the 1980s and 1990s?
The initials stood for Recharge and Recycle. Recycling polycarbonate
resin, in my mind, represents a good opportunity because it is among the
most expensive, retrievable plastics. Pure, virgin resin, for example,
normally sells for $3.00 to $5.00 per pound, depending upon volume. A
sustainable collection program is the key to making money on recycled
polycarbonate (PC). The collection system described in this article
gives rechargers a means to send all of these waste materials to one
collection center.
I don’t know what the payment would be for this amount of metalized PC
resin, but any money is good money. And, if the PC collection box brings
in a new customer for ink or toner cartridges, then it becomes a
valuable “reverse marketing” sales tool as well.
My advice is to look beyond the cartridge to expand your business. Or,
putting it in the most common terms, “Think outside the box!”
A PRIMER ON OPTICAL STORAGE MEDIA
Optical storage media comes in two popular families: CDs (Compact Discs)
and DVDs (Digital Video Discs, or Digital Versatile Discs). Depending
upon the type, CDs have a storage capacity of up to 700 megabytes (MB)
and DVDs up to 8.5 gigabytes. The new DVD formats such as Blue-Ray and
HD-DVD have even higher capacities. Optical media are used mostly for
storing computer data, to distribute computer software, music, movies,
and other pre-recorded content
Within each family, there are three types: Recordable, Re-writable, and
“Stamped”, or “Pressed”. The last type is the most common, representing
the pre-recorded music or video content most consumers are familiar
with. For these discs, the actual data content is physically molded into
the disc and cannot be changed.
Initially, all optical discs begin as a flat, clear, PC substrate made
using a precision injection molding technique. The PC must be optical
grade and the manufacturing conditions are critical to the eventual
electrical signal characteristics of the playback device. Extensive
development has gone into the coding and error-correction systems within
the data and the recorder or playback device to minimize the effect of
handling damage (scratches, fingerprints, etc.)
For CDs, the substrate is 1.2mm thick and the actual data pattern is
either “stamped” into the surface, or, in the case of recordable and
re-writable formats, a spiral groove pattern is embossed into the
“blank” substrate. This allows the recorder’s laser to stay “on track”
while the data is written.
The data is represented by a complex pattern of oblong features (pits)
and the space between the pits (lands). Recordable discs use a
spin-coated abatable dye to create the pits and lands in response to a
laser beam, and re-writable discs use a complex metallic alloy, applied
via sputtering, to create a layer that responds to a recording beam by
changing its phase (either amorphous or crystalline) and therefore the
reflectivity of the read back signal. The discs can be overwritten with
new data since the phase change is reversible.
DVDs employ much the same principle, but actually contain two substrates
each of 0.6mm thickness. The layers are bonded together and each can
contain data. For most DVDs (single-sided), the second substrate is
actually a “dummy” and contains no data. For Dual Layer DVDs, the second
substrate is also a “dummy”, because the two layers exists on the same
substrate. Finally, it is possible to have both double sided and dual
layers DVDs.
Above the recording layer, all discs contain a sputtered reflective
layer to provide a path for the returned beam. These are either aluminum
in the case of “pressed” discs, and silver alloy for recordable discs.
Gold is used in some high-end CD-Recordable discs because it enhances
the archive life of the recorded data considerably.
Finally, above the reflective layer is a UV-Curable lacquer sealant to
resist moisture, and then a printed label applied via conventional
screen printing.
freerecycling.com
A company located in Laguna Niguel, California is launching a highly
specialized plastics recycling operation that should be of strong
interest to ink jet cartridge remanufacturers who want to expand the
scope of their business.
The principals of freerecycling.com are Alwin Morgenstern and Ursula
Schoeneich who have served the imaging industry for the past 18 years
under the banner of Service4U GmbH in Germany. They settled in the
United States in the year 2000 and continue to collect and sell ink jet
cartridges to a base of close to 10,000 customers in the United States
alone. As the attached drawing illustrates (Photo No. 014) their
customers are scattered across 50 states, Canada and Mexico
INPUT STREAMS
According to Alwin Morgenstern, “There are four main input streams for
polycarbonate waste: 1) the music industry; 2) the movie and television
industry; 3) offices, hospitals, and government agencies; and 4) small
offices, home offices (SOHO), and private homes.”
The first two streams—music, movies, and television—usually press a
larger number of discs than are actually used or sold. As a result,
millions of these unsold or excess discs must be discarded in a secure
manner. In most cases, they are accurately counted before being
destroyed so that the number of unsold discs can be deducted from the
total amount produced. This count enables the producers to determine the
correct royalty payments due to performers, writers, musicians, and
other contributors. “These first two streams,” says Morgenstern,
“typically have fewer sources, but output much larger volumes per source
than the last two. They can be expected to deliver truckload quantities
of waste metalized PC discs.”
Office and home sources, on the other hand, output smaller quantities of
discs and require a network of collection containers and a closely
managed and maintained pick-up system. For the small package shippers,
including FedEx, UPS, and the United States Postal Service, however, it
is the ideal package—clean, lightweight, safe, and shipped from
locations nationwide.
COLLECTION
It all begins with a unique collection container developed by Alwin
Morgenstern for which patent protection has been applied. It is shown in
the
attached photograph. This 35-gallon, wheeled container (or waste bin)
serves two functions: 1) it destroys data; and 2) it collects discs. The
bin is fitted with a locking cover that has a horizontal slot in front
and a vertical slot in the rear. When a CD or DVD is passed horizontally
through the front slot (see Photo No. 001) all data is instantly
destroyed by a series of sharp blades operating simultaneously on both
sides of the disc.
The scored, scratched disc is next inserted vertically into the rear
slot where it falls into the recycling bin. Because the locked cover has
a very narrow width, the rear slot serves as a filter that prevents any
jewel cases from entering the bin. These would contaminate the PC discs
with polystyrene resin.
The bin has a capacity equal to roughly 6,000 discs. There are about 30
discs to a pound, which means the wheeled container could hold up to 200
pounds of discs. Because each disc contains a vacuum metalized layer the
waste material has a low value—perhaps 25 to 50 cents per pound.
Return shipment boxes and ARS (authorized return shipment) labels are
provided by the central collection facility. Each shipment box will
handle about 40 pounds, which is about 1,200 CDs or DVDs.
The patented waste bins will be sold to each collection location for an
estimated $345 with the recharger earning a $45 commission on each sale.
Included in the price of each waste bin are a set of spare parts, tools,
a lock and key, shipping boxes and ARS labels.
COLLECTION LOCATIONS
In addition to recharger businesses and refill kiosks, candidate
collection locations are numerous. They include internet cafes, fast
food shops, office discount superstores, big box department stores,
discount hardware and building supplies centers, medical centers,
bookstores, universities, office buildings, etc. .
Why should any business want a secure CD/DVD waste collection bin on its
property? The answer is simple: these bins are sales tools. They attract
customers who are environmentally responsible and want a secure place to
dispose of their discs.
That motive brings them into a shop, store, or kiosk where they can be
sold any number of products, especially remanufactured cartridges.
While the price per pound paid to the individual collector may seem
small, it becomes a steady, sustained income that will build up over
time.
DEMETALIZING EACH DISC
At the central collection point, or warehouse, incoming discs are stored
for processing either in a wet chemical or dry mechanical operation. The
latter system is depicted in Photo No. 007. Here the discs are fed onto
a conveyor belt where they are visually inspected by plant workers (or
robotically by optical devices). Each disc is passed through a
mechanical stripper, such as the one shown in Photo No. 006.
Moving along an overhead conveyor, each disc passes an array of steel
brushes that scrape off all coatings, labels, and metallic layers. The
dust particles and flakes generated by this abrasion process are sucked
through the metal grill bars by vacuum and transported by the air stream
to a bag house collector.
Depending upon the volume of dust and flakes collected, this material
might be smelted to extract the metal layer (burning off paper, dye, PC
dust, etc.) and then analyzed for any precious metals (gold or silver
primarily). If there is a substantial content of gold or silver, the
retrieved metal can be further processed to separate out these valuable
metals.
A demetalized disc is shown in Photo 004. Here, the abrasion pattern is
Evident, showing where the steel brushes scraped off all outer layers to
ensure that each salvaged disc is pure polycarbonate.
The demetalized discs are next granulated to produce a flaked
end-product, as shown in Photo No. 005. This material might be called
“recycled, Hi Grade Polycarbonate” or Demetalized, Hi Clarity
Polycarbonate.” Polycarbonates are among the toughest and most flexible
polymers known. They command the highest prices (typically, $3.00 to
$5.00 per pound) in virgin form because the material is optically clear
and can be used in CD and DVD production.
Recycled polycarbonate resin, however, cannot be guaranteed as optically
clear, hence it cannot be used for discs, but it can be colored for use
in a variety of applications, such as toys, machine parts, sunglasses or
any product that needs a tough, almost unbreakable plastic and which
conforms to the material specifications of polycarbonate. Toymakers, for
example, can replace brittle, breakable polystyrene toys with the
superior polycarbonate material that this recycling stream generates.
BUILDING A COLLECTION NETWORK
The ancillary benefits of this program stem first from the construction
and growth of a network of collection points. As Morgenstern puts it,
“This first phase will help educate consumers and increase their
awareness of the importance in recycling valuable resources. In a second
phase, the network can be expanded to include the collection of other
recyclables.”
There is also a third phase, Morgenstern notes, which converts the
collection base to a distribution base. “Because it will provide direct
access to the consumer market this network could also become an
important sales channel for imaging, office, and related products.”
SUMMING UP
In summary, as rechargers continue to face new and more difficult
restraints on business growth and profit margins, perhaps it’s time to
seek other related opportunities. Let us recall the mission of the
rechargers’ “Brotherhood of Entrepreneurs.” It is to reduce, reuse and
recycle manufactured products. Environmentally aware consumers, in ever
increasing numbers, are getting behind these 3Rs.
The recovery and recycling of valuable polycarbonate resin from CDs and
DVDs is a promising path that is compatible with the rechargers’ cause
and creed. Looking beyond the cartridge into other areas for business
growth, I submit that the strategy for rechargers suggested in this
article might become an important part of the way forward.
Editor’s Note: If you are interested in obtaining more information
regarding this opportunity, please visit
http://www.freerecycling.com, or send
an email to Mr. Alwin Morgenstern at
mail@freerecycling.com
SIDE-BAR
In March of 2007, Ursula Schoeneich, CEO and President of
freerecycling.com, was nominated for an Excellence in Entrepreneurship
Award by the Orange County Business Journal. Her firm has grown to
become a major force in the cartridge remanufacturing industry,
supplying empty ink jet cartridges to more than 10,000 customers in the
United States alone.
According to an OCBJ article (March 5-11, 2007), freerecycling.com
ink jet cartridge collection service “is free to anyone interested in
getting cash back for recycling ink cartridges. Schools, nonprofits and
churches are using the service as a fundraising mechanism and people can
earn rebates by referring a friend to the site.”
As a core broker, freerecycling.com collects used ink cartridges from
HP, Canon, Dell, Lexmark, Compaq, and Xerox printers. Ms. Schoeneich who
is the wife of Mr. Alwin Morgenstern, serves ink jet cartridge
remanufacturers worldwide. “With 18 years of experience in recharging
and recycling, we have kept millions of cartridges out of landfills,”
she declared. “Even so,” she continued, “every year more than 1 billion
ink cartridges are used and thrown away, either carelessly, or because
they can no longer be cleaned or remanufactured.”
freerecycling.com is a WBENC (Woman’s Business Enterprise National
Council) certified 100% Minority Women’s Business Enterprise. Its
expanded collection program now includes cell phones and the retrieval
of CDs and DVDs as the firm’s latest venture.
PHOTO CAPTIONS
(In order of appearance)
Photo No.
014 A map of the United States and Alaska showing current customers of
freerecycling.com for virgin ink cartridges ready for refilling
003 A wheeled trash container is fitted with two slots through which
each disc must be fed. Because the cover is locked, the entry slot
cannot be bypassed hence no foreign objects, or trash can be placed into
the container
001 Each disc is first passed through a front slotted member that houses
a mechanical data destruction device. The disc is scored or scratched so
that it cannot be read
002 The scratched disc is then inserted into the rear slot where it
falls into the waste bin. The narrow slot serves as a filter so that no
polystyrene jewel boxes can be slipped into the container to contaminate
the polycarbonate discs
007 Flow sheet for the mechanical demetalizing process
006 Discs are fed continuously from an overhead conveyor belt and
vertically past an array of steel brushes that remove all metallizing
layers and other coatings, labels, etc.
004 The abraded disc pictured here shows the wire brush marks formed
when it passed through the mechanical coating removal device
005 Recycled polycarbonate after granulation
010 Ms. Ursula Schoeneich |
