Global shipments of printer consumables have undergone sustained growth, spurred by the surging demand for printing equipment and high performance desktop printing applications. However, the industry is not without its challenges.
For makers of remanufactured cartridges, empties are harder and more expensive to obtain because end users continue to resist recycling. Hence, makers may have to put in place more sophisticated, and often more costly, reclamation schemes.
Furthermore, brand owners have been aggressively defending their patents in courts by filing lawsuits against ink cartridge manufacturers and distributors over infringing inks. While this has failed to put a serious dampener on growth, makers are compelled to enhance product value by improving the performance of their offerings and applying for patents in major export regions.
The printer cartridge and toner supply from Greater China is a mix of compatible and remanufactured units that commonly support printer brands such as Hewlett-Packard (HP), Epson, Canon, Lexmark and Brother. Zhuhai in Guangdong province is the main production center for printer cartridges and toners. It hosts two of the largest makers in the region, both of which are featured in this report. Factories in Zhuhai produce about 70 percent of mainland China's output.
This report covers makers of printer ink and toner cartridges, continuous ink supply systems and ink refills in Greater China, which collectively produce about a quarter of the industry's output. The majority of these makers typically generate more than 50 percent of their sales revenue from exports.
Based on the manufacturing, product development and export statistics provided by 38 printer cartridge and toner manufacturers, including 31 from mainland China, four from Taiwan and three from Hong Kong, Global Sources presents the following findings:
• Mainland China suppliers have monthly production capacities of up to 6.5 million units. Many of these makers have excess capacities to cope with new orders.
• Large-volume makers prefer to focus on compatible toner cartridges, while entry-level and mid-sized suppliers concentrate their effort on remanufactured toner cartridges.
• While most makers ship their products predominantly to established markets such as Europe, North America and Asia, some are exploring emerging opportunities in Africa and Oceania.
• Makers outsource a considerably large portion of the manufacturing processes to cut down on production costs. Only final assembly and packaging are mostly done in-house.
• Manufacturers are keeping price increases to a minimum to avoid losing out to large-volume makers that can offer competitive prices.
• Production of water-resistant inks and IC designs as well as increasing ink and powder capacity and print yield are some of the key R&D initiatives.
• Ink cartridges will continue to dominate this market segment well into 2007, but toner cartridges are gaining traction.
To come up with this report, Global Sources research teams toured the factories of 21 makers and discussed with top-level executives about manufacturing, sales and export performances. The report has an in-depth profile of each of these makers, as well as detailed profile tables of another 17 suppliers.
All suppliers were asked to participate in a survey designed to provide insight into product and price trends, and major issues facing the industry in the next 12 months. The Industry Background section highlights the main sourcing and manufacturing hubs, as well as the covered regions' export orientation and major challenges. This is followed by the Manufacturing Capability section, which outlines the key production processes and quality control procedures adopted by manufacturers.
Industry Overview
Global shipments of printer consumables have undergone sustained growth, spurred by the surging demand for printing equipment and high performance desktop printing applications.
New models of multifunction printers (MFPs) as well as inkjet printers, photo printers and color laser toner printers are proliferating in the market.
About one-third of the printer consumables industry, worth about US$100 billion, is accounted for by desktop ink cartridges while laser toner cartridges account for almost another third.
Makers in Greater China produce about a quarter of the industry's output, including printer ribbons, toners, toner cartridges, ink cartridges, continuous ink supply systems (CISS) and ink refills.
The printer cartridge and toner supply from Greater China is a mix of compatible and remanufactured units that commonly support printer brands such as Hewlett-Packard (HP), Epson, Canon, Lexmark and Brother.
According to the China Center for Information Industry Development (CCID), mainland China makers produce at least 10 percent and 20 percent of the global supply of ink cartridges and laser toner cartridges, respectively.
Zhuhai: Greater China's Printer Consumables Hub
There are at least 170 manufacturers of printer consumables in the Greater China region. Among them, at least 70 percent have factories in Guangdong province, mainly in the cities of Zhuhai, Shenzhen, Guangzhou, Dongguan, Shunde, Foshan and Zhongshan. Zhuhai leads the pack as it hosts about 30 printer consumables factories, including the region's largest producers, Gree and UTec, whose production arm is Print-Rite Unicorn Image Products Co. Ltd. Factories based in Zhuhai produce about 70 percent of mainland China's printer consumables output. Smaller factory clusters may be found in other mainland China locations such as Shanghai, Fujian and Zhejiang.
Supplier Profile
Aaprotech Enterprise Co. Ltd
Established in 1996, Aaprotech Enterprise Co. Ltd provides toner cartridges for laser printers and fax machines. It is based in Taipei, Taiwan and has 25 employees.
Toner cartridges for laser printers account for more than 80 percent of Aaprotech's overall sales, while the remaining 20 percent come from cartridges for fax machines and multifunction printers (MFPs).
The company's 2005 sales reached about US$2 million, with cartridges generating US$1.6 million. Exports to Southeast Asia and Oceania contributed 10 percent to total cartridge sales in 2005.
The company contacts agents and distributors to sell its products overseas. Seventy percent of its output comprises off-brand cartridges, while the rest are shipped to OEM buyers.
Manufacturing Capability
Aaprotech operates a 350sqm manufacturing facility, which is located in a four-story building. Its administration office is on the first floor.
On the second floor are packaging lines and production workers visually inspecting finished products. On the third floor, production workers assemble and conduct inspections on finished products.
Every product comes with a barcode indicating the worker responsible for its assembly. This enables easy quality control and worker management.
Used cartridges are sent to the fourth floor for cleaning. Production workers use specific equipment to remove leftover ink or dust through vacuuming to avoid stain on the cartridges. Then they use imported machines to dismantle used toner cartridges, mount new components and fill the clean empty cartridges with toner powder.
Aaprotech makes sure key materials including the OPC drum, blades and toner powder are replaced with new components.
The company outsources most procedures such as mold making and plastic injection to Taiwan factories. It sources ICs and toners mostly from Taiwan suppliers or Static Control Components Inc.
Aaprotech also cooperates with component suppliers to source suitable components to improve product quality.
Its ISO 9001-certified factory has four QC workers who oversee product quality from IQC and IPQC to FQC. Aside from internal inspection, the company also purchases various printer models to test the printing quality and compatibility of its toner cartridges.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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