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Trends in Colored Toner Based Printing

10 Aug, 2007 By: Editorial Staff imageSource

Trends in Colored Toner Based Printing

The toner manufacturing industry has faced a major turning point over the
past couple of years with global shifts and the demand for higher quality and
color. The market for toner and related materials for electrophotography
continues to expand and color applications have increased in demand. The market
for consumables has changed both technologically and geographically.

Technology Developments

The trends in Chemically Prepared Toner are that the manufacturers of
emulsion aggregation toner, such as Fuji Xerox, Konica Minolta and Mitsubishi
Chemical, have announced expansion plans for production and started active
investment as they transition to chemically prepared toner from pulverized
toner. Canon, the leading manufacturer of toner by suspension polymerization, is
increasing the production volume, though they keep expanding the production
volume of pulverized toner as well. They use both kinds dependent on
application. The manufacturers of solvent dispersion toner, Ricoh, Fuji Xerox,
Sanyo and DPI Solutions are expanding the production volume of colored toner.

In the field of pulverized toner, Sharp differentiated their strategy on
color toner by introducing conventional production. Kao also launched pulverized
toner with a median diameter of 5.5 microns made by their new modified
pulverized method which, they claim, is able to produce the same image quality
as polymerized toner currently on the market.

In addition to these changes, there is a clear trend for the OEM and OEM
contractors to invest in new technology and colored toner technology. The
independent manufacturers are not investing to any great extent. As a result,
there will continue to be a shift of market share from the independent
manufacturers to the OEM and OEM contractors.

Geographical Shifts

Nashua, a major toner manufacturer in the US withdrew from the toner
business in March 2006. As a result of this, there have been effects on resin
manufacturers and other business partners. In addition, Konica Minolta sold
their pulverized toner plant in the US and concentrated on investment in
polymerized toner. Info-Labs in Ireland have also ceased production.

Tomoegawa Paper established a toner manufacturing plant in Huizhou, China in
July 2005 and started operations in November 2006. Jadi Technologies of Malaysia
have also established production in Suzhou, China. New Asian toner manufacturers
are expanding production in China since the country is seen as a potential
market rather than, as before, just as a production base of low labor cost. The
main production in China is of monochrome toner; however, some companies are
aiming to produce color toners.

These developments are part of the gradual and inexorable shift in production
from traditional manufacturing locations in the USA and Europe to other parts of
the world.

Shift of Growth by Geographical Location

Production volume in the USA is growing at a rate lower than the growth of
usage; whereas, production in Europe is growing at a rate slightly higher than
consumption. The major growth in production is in Asia. This is where the major
investment in technology and production facilities is being made, with new
technology and advanced colored toner production facilities being built in Japan
and a steady increase in investment in conventional toner production in China.

Other than at Xerox in Webster, NY and Toshiba in Mitchell, SD, in the USA
there is no significant investment in production plants. If toner technology
used by Japanese OEMs changes to be predominantly CPT Monochrome and Color, then
there could be a loss of production by Japanese OEMs in the US too as there is
no investment in CPT production at Japanese manufacturers in the USA either. The
growth in Japanese manufacturing volume in the US is lower than Japanese
domestic production growth – 1.67 CAGR% vs. 7.91CAGR%.

Shift to color in offices is driving supplies growth

The growth of all-in-one monochrome toner cartridge sales volume is
predicted to continue at less than 2% CAGR. This is because there is a trend
towards higher page yield cartridges and the move towards the purchase and use
of color print devices. By contrast, toner cartridges for color printers are
increasing at greater than 50% CAGR and colored toners doubled in share in the
printer toner market between 2003 and 2008. This growth of color toner
complicates the market for third parties as the technology and cost issues to be
faced in selling to the market multiply.

There is competition among mono laser vendors to replace their installed base
with low cost affordable color laser/LED printers and printer MFPs which also
now brings them in competition with inkjet in the office. Color laser devices
and MF versions now also compete with universal copier/printers. Cartridge sales
for color devices are forecast to grow 50%, but a considerable proportion of
prints made using these cartridges will be black.

The factors driving the growth of the color laser printer market are the
higher profitability of the colored printer business, the fight for market share
between brands and the continued improvement in acceptance of colored printing
by the user population. OEM manufactured supplies continue to dominate the
market; however, as a result of several factors not the least of which is the
high cost of cartridges, users are ready to buy aftermarket color cartridges.
The buyers’ attitudes on buying supplies are identical to their attitudes on
monochrome with the emphasis on their desire for quality, reliability, etc. To
date, third party manufacturers have had difficulty in addressing the issues on
providing alternatives to OEM supply, but when the products do arrive to the
right standard, users will buy good quality aftermarket color laser cartridges.
At the moment, the aftermarket share of total market for colored toner
cartridges is around 4% with growth to a 6% share predicted by 2009. 

Of course there are challenges that third party manufacturers must face when
addressing today’s market. There has been a proliferation of machine and
cartridge models with consequential "churning" - continued and rapid model
obsolescence. This churning or rapid change in design of cartridges hampers the
aftermarket’s ability to develop and obtain necessary supplies of parts and
materials for the manufacture of compatible and remanufactured cartridges. It
also fragments the installed base of machines making it more difficult and more
expensive to address the market. Combine this with the technological challenges
of low melt toners and the laser aftermarket has reached a crossroads where
color is challenging, but is a requirement for any business growth.

Business As Usual

The industry will, as with all the challenges faced during its history,
contend with these global shifts and the technological challenges and prosper.
As with all things, this is the continuance of the evolution of the industry and
whilst the industry will, without doubt, prosper, the constitution of the
industry will undoubtedly change to adapt to this changing environment.

These trends will challenge the remanufacturers of cartridges in
transitioning into the color market. Component manufacturers (OPCs, development
rollers, charge rollers, blades, chips, toners, etc.) will develop products to
support the remanufacturing industry as it changes over to color. These new
products will enable the remanufactured products to provide the performance
needed to compete with "OEM quality". These products will be available to the
market and, with time, will be able to be bought with confidence in constancy
and durability of performance. In addition to this, just as we have seen with
the evolution of monochrome products, there will be reduction in cost of these
aftermarket products in line with increased competition.

- Contributing writer Graham J. Galliford of Galliford Consulting &
Marketing, Ventura, CA

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