Refeel eyes cartridge refilling market

In a bid to tap the huge market for OEM printer cartridge users through re-manufactured and re-filled cartridges using latest technology, Kolkata based Refeel Cartridge Engineering(RCE) plans its foray into the segment through the franchisee route.

The printer cartridge market is estimated at Rs 1400 crore in the country of which 10 to 12 per cent is catered to by the refilled cartridges.

The sector is highly unorganised, and basically resorts to 'drill and fill' method to refill cartridges, without catering to customised technological requirements of the printers, said Alkesh Agarwal, one of the proprietors of RCE.

"We want to convert the remaining 88 per cent of the market that would now buy OEM cartridges into our consumers. We would offer the same quality as a cartridge manufactured by an OEM company but at 25 per cent of their current market price.", he added.

RCE will source 170 varieties of ink from OCP, Static Control Components,Sensient Technologies, Uninet Imaging Inc. and other German and US based manufacturers, and will be equipped to supply cartridges of around 400 specific varieties, informed Agarwal. RCE has already opened a franchisee at Jaipur, and is coming up with 2 stores in Kolkata by next month.

It has plans of opening 25 such outlets in the country by the end of this year with an investment of around Rs 15 lakh per outlet. It will charge its franchisee partners a 6 per cent royalty on its gross turnover in addition to 3 per cent advertisement royalty per year.

RCE will provide necessary assistance in terms of raw materials sourcing, machinery, and technical training together with back-end support for trouble-shooting to its franchisee partners. It has already invested Rs 50 lacs on machinery and related project costs; the machinery being imported from Shanghai, China.

The company is expecting a turnover of Rs 4.5 to Rs 5 crore for the financial year '07-'08. It plans to expand its retail presence by three-fold next year taking the number of outlets up to 100, and a subsequent rise in revenues to Rs 20 crore, explained Samit Lakhotia of RCE.

In the last two to three years, 80 to 100 newer models of printer cartridges have been introduced into the market and the OEM companies continue to introduce newer products in the market. The R&D of the re-fill and re-manufacture segment needs to be abreast with such technological innovations.

As the world-wide market for the concerned segment stands at $35 billion for the ink-jet variety, $10 billion for colour laser cartridges, and companies like Static Control Components Inc. which are the major sourcers of components to the re-filling and re-manufacturing segment have well developed R&D functions, explained Agarwal.