LASERCYCLE DIVIDES TO CONQUER

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LaserCycle divides to conquer
Lenexa firm spins off its wholesale division
LaserCycle Inc., a remanufactured printer cartridge firm that’s been growing faster than ink dries, has spun off a division into a separate, 500-employee corporation.The new corporation, InkCycle Inc., has taken over remanufacturing and wholesale sales of the roughly 750,000 toner and inkjet cartridges cranked out each month at 11100 W. 82nd St. in Lenexa’s Brookhollow Business Park.LaserCycle, which retained 30 employees and direct sales of cartridges and other printer supplies and services, completed the divestiture on April 1.”As we continued to grow,” said Brad Roderick, executive vice president of InkCycle, “it became clear that we had two separate business models — one that ships thousands of units and one that sells a few cartridges at a time. We needed two distinct companies so they could focus on their own sets of core competencies.”Roderick said LaserCycle founder Rick Krska had led the corporation to double-digit growth each year since he started refilling and recycling toner cartridges in his basement in 1992.Roderick declined to comment on current revenue, and Krska, who is in Europe, could not be reached. But Roderick said LaserCycle hit its $40 million target in 2003 and grew about 30 percent a year through 2005.Those figures, plus the 50 percent growth Krska projects for LaserCycle and InkCycle this year, add up to combined 2006 revenue of more than $100 million.Contracts to supply private-label remanufactured cartridges to several national retailers fueled the company’s rapid growth and spurred the recent reorganization, Roderick said.Separating the companies will help the manufacturer avoid coming into competition with customers that sell directly to businesses.Now, LaserCycle is one of those customers. To keep it at arm’s length from InkCycle, new LaserCycle leadership is being recruited from outside the corporations. Charlotte Barksdale, previously with The Kansas City Star Co. and Scott Rice Office Works in Lenexa, recently joined LaserCycle as business manager. The search continues for a CEO.In addition, InkCycle has moved to its own 20,000-square-foot building at 8208 Nieman Road in Lenexa.Less than a block away, InkCycle’s CEO — Krska — presides over cartridge remanufacturing in the company’s 85,000-square-foot building in Brookhollow. A distribution center once there now consumes 115,000 square feet in the nearby Meritex Inc. underground business park.”They’ve been an amazing success story over the last several years,” said Blake Schreck, president of the Lenexa Chamber of Commerce, “and it’s my understanding that they’re looking to expand again.”Schreck said InkCycle is exploring potential sites where it could consolidate operations. And the Lenexa chamber is poised to do whatever it can to keep the juggernaut in the city.”There are some negotiations going on for space,” Roderick said, but he declined to elaborate.Pam Whiting, a vice president of the Greater Kansas City Chamber of Commerce, which named LaserCycle as its 2004 Small Business of the Year, said one secret of Krska’s ongoing success can be found on his business card. It reads, “Rick Krska, chief executive servant.”Krska inherited his “servant leadership” philosophy from his father, who taught him that “a successful business stems from identifying a way of being of service to others,” Whiting said.After 14 years in production management at AlliedSignal Aerospace, Krska refired the entrepreneurial spirit that prompted him to start several small businesses as a young man.Krska researched various fields, then decided to apply that spirit and the high-precision manufacturing skills he had learned at AlliedSignal to the production of cheaper, environmentally friendlier printer cartridges.LaserCycle originally focused on regional sales of remanufactured toner cartridges. Its product line broadened in 1996, when Krska launched the InkCycle division to capitalize on the emerging recycled inkjet cartridge market.In 2003, the company’s national wholesale business kicked in with the signing of a deal to supply remanufactured inkjet cartridges for the Staples retail chain. Since then, InkCycle has picked up supply contracts from several other superstore chains in the office products, consumer electronics, food and drug, and discount retailing sectors.Remanufactured and generic cartridges now account for about 35 percent on the toner side and about 10 percent on the inkjet side of a roughly $30 billion U.S. printer cartridge market, Roderick said.Further penetration has been hampered by quality issues associated with some of InkCycle’s competitors, Roderick said. But because of Krska’s emphasis on high quality and service, he said, InkCycle continues to grab share in a sector that original cartridge manufacturers avoid.”The waste stream is our supply chain,” Roderick said. “So there’s a lot more human work that goes into it. Plus, it’s not something with enough size for a Hewlett-Packard to put into their portfolio.”The world’s largest inkjet cartridge recycler, InkCycle manufactures about 50 different toner cartridges and about 30 different inkjet cartridges — some of them for original cartridge manufacturers.The company’s manufacturing equipment is custom-designed and built in-house, Roderick said, and it is operating 20 hours a day, six days a week to keep up with demand.That demand has boosted the fortunes of InkCycle and its half-dozen area suppliers.”Our business has quadrupled with them,” said Lon Wilkerson, co-owner of Service Pak, a Lenexa company that supplies printed cartridge boxes. “Rick and his team have great marketing skills, and they found a great niche in the computer world.

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May 17, 2006 at 10:03 AM