STRAIGHT TALK ON OEM AND

AFTERMARKET STRATEGIES

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TRENDS IN THE OFFICE EQUIPMENT INDUSTRY

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Plays Ball with the

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April 21-22, 2016BARCELONA SPAIN C A N C U N · M E X I C O

J U N E 2 - 3 , 2 0 1 6

AMERICASIssue 72 (US$10.00)

9 772050 644909

Issue72|www.iRecyclingTimes.comIssue72|www.iRecyclingTimes.com

AFTERMARKETPLAYS BALL WITH THE

CMYK Industry's Patrick Naude Talks InkTank and other new technology opportunities in South AfricaViolien Wu, Head of News and Editorial, RT Media

BASEBALL PRO

25

www.iRecyclingTimes.com|Issue72

FRONT COVER STORYFRO

Many children dream of becoming a doctor, a teacher or even an astronaut. For young Patrick Naude, growing up in South Africa, his fi rst dream was to be a fi reman, and then is was to become a boxer.

Today Naude runs the very successful CMYK Industries based in Durban on the east coast of South Africa—the second most important manufacturing hub in South Africa after Johannesburg.

Many have the fi rst impression that Naude is indeed a sportsman. And they are not wrong. He represented South Africa playing baseball at the World Cup and other international tournaments.

So how come a sporting hero now keep expanding into the print consumables industry? Naude explains that just like the “Big Brother” relationship between OEMs and the Aftermarket, Naude’s big brother showed him how to make good money out of reselling printer cartridges. “I wanted to become a sports pro, but that didn’t play out and when I returned from a tour in Australia in 1996. I needed a reliable source of income.” Naude’s brother was already working in the industry and was engaged in the printer cartridge trading business where the OEMs still held almost 100% of the market. He remembers it took them a long time to educate the customers about remanufacturing.

Naude’s mother worked at a University for 20 years and his father was a business

entrepreneur. “My dad pointed out the futility of a sports career. I think hanging out with him made me go the route of being an entrepreneur.”

Naude fi rst established CMYK over a decade ago in Kwa-Zulu Natal supplying raw materials to the local remanufacturing industry. He now quite enjoy the current job, “I enjoy the time with family and friends and enjoy being in the remanufacture/recycle industry as it’s continually challenging us with new releases and models. So every day is

26 FRONT COVER STORY

Issue72|www.iRecyclingTimes.com

exciting. I am a still lover of sports, as I believe sports help people understand and know how to work as a team. It also helps you be focused and directed to reaching a goal.”

Expand the South AfricaSouth Africa is now recognized as one

of the BRICS countries: Brazil-Russia-India-China and now South Africa—a new potential market for the Aftermarket.

Being a local company, Naude is very positive about the market because the local Rand currency has been depreciated signifi cantly against the US dollar. Imported OEM products are more expensive and Aftermarket suppliers of quality products can gain in such a market. “I continue to be excited. The OEMs are working hard, and consumers are expecting better quality, which means we really need to work with reliable component suppliers. Companies can no longer survive in the industry by offering poor quality products,” Naude explains.

The growing export business is also helping to boost the market in South Africa. Naude reveals, “Prior to South Africa being recognized as one of the

BRICS countries, the country’s export trade with other BRIC countries just registered a measly 6.2% of total exports. When South Africa took up its seat as the fi fth member of BRICS in 2011, exports grew to 16.8%, experiencing a growth of 29% by the end of that year. The prospects for continuing economic growth through the access to new BRICS country export markets bodes well for the future.”

I couldn’t help but wonder if doors are

already wide-open for the Aftermarket in South Africa, how are neighboring countries faring? Naude help me to understand the diffi culties. “We are trying to be as aggressive and cover as many countries as possible, but it is not always possible and easy to trade or do business, as Africa is really large.” Naude went on to explain “However, I think our industry can only continue to grow, and it will grow

even faster once the Internet is available across the entire continent of Africa. The basics have to be there fi rst: water, food, shelter… then business, then printing.”

Naude also notes that neighboring countries in South Africa are still new to the industry. There are no big factories. Just small one or two man businesses, remanufacturing a couple of cartridges a day. “My hope is to take the industry opportunities to the people, educate them

on business and on quality. From here we know the basics are covered. Then simple mathematics takes over. By this I mean, if you buy for $5, and sell for $10, you have $5 left to buy your daily bread.”

These local conditions help explain why legal battles between OEMs and the Aftermarket are not

a hot topic in South Africa. As a young, emerging market, the region has less than 1% of the global sales. In his opinion, Naude says the OEMs are not under threat to lose market in Africa as they might in the USA or Europe. However, Naude quickly adds industry players should respect the intellectual property of the OEMs.

Naude also surprised me as he expressed

THE GROWING EXPORT BUSINESS IS ALSO HELPING TO BOOST THE MARKET IN SOUTH

AFRICA.

FRONT COVER STORY 27

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his sincere gratitude to the OEMs. He reminds me, “I like to call the OEMs ‘Big Brothers.’ Without such Big Brothers, we would not have the print consumables industry. Just like my ‘Big Brother’ who introduced me to the industry.”

New TechnologiesJust as nothing really stands still in

technology and business in our modern world, so too R&D and new solutions are primary matters for the print industry as well.

Naude cites chip and toner technology as an example. “You can tell how cartridge chips are getting smaller that the OEMs are watching the Aftermarket all the time. In addition, printing devices are getting faster to meet consumer expectations and consequently toner formulations have to change to meet the standards.”

Turning to ink technologies, Naude says it will be more diffi cult for ink supply companies to survive. HP’s new CISS ink tanks are designed to meet market needs, fi rst introduced by the Aftermarket 5 years ago, and then followed by other OEMs including Epson. “When these printers fi nally arrive here in Africa, it will impact the supplies industry. Consumers will buy a

printer and a life-time supply of ink for that printer all at the same time. Where is the opportunity for OEMs and the Aftermarket to sell additional ink supplies?” Naude notes the region is running behind other markets when it comes to CISS and there is a need to educate and help consumers understand it better.

Further, the newer inks, such as UV inks, are very complex and its diffi cult to reach the same performance and reliability of the

OEM standard.” He sees the differences that need to be conquered being quality, dry time and viscosity, or just simply “getting it right” on paper.

Naude notes, however, that ink is still a home and small offi ce technology. Lasers still win in the corporate markets, However, with faster, cheaper ink tank solutions, inkjets will attract more attention.

Naude sees another diffi culty for remanufacturers is with sourcing empty inkjet ink cartridges. “It’s hard for ink cartridges collectors and remanufacturers to fi nd empties. Consumers and remanufactures alike need to setup collection programs in order to collect and recycle empties.”

Naude expects to see more mergers and acquisitions in 2016, “I see smaller recyclers merging with bigger ones. I see

more of the larger factories buying or getting closer to the source of the raw materials so they can control and lower their production costs.”

Naude says it can be easy to keep and build on your current customer base.

CMYK Industries is looking abroad to India and the Middle

East to grow his business. “We are hopefully making good relationships as we want a friend as a customer, not a once off purchaser.”

This is how Naude “plays ball” today. Not a baseball career, as he fi rst thought …but with CMYK—the four basic colors in printing—providing a solid base to pitch his entrepreneurial skills in a thriving BRICS economy.■

R&D AND NEW SOLUTIONS ARE PRIMARY MATTERS FOR THE

PRINT INDUSTRY AS WELL.