*NEWS*ISRAEL:O.DEPOT WINS TONER CONTRACT

[Anonymous]

Office Depot wins contract to supply all printer cartridges
to gov’t offices(ISRAEL)

Office Depot has
won the sole right to supply government offices with toner and ink cartridges
for printers. The state has tens of thousands of such devices, and revenues are
estimated to be in the hundreds of millions of shekels a year.

The new agreement is for both new and refilled cartridges. It
sets a price of only NIS 25 for a refill of an HP black ink cartridge, which,
new, costs NIS 100. Toner for laser printers will cost only NIS 81, compared to
NIS 334 for original HP cartridges.

The deal covers not only HP printers, but also
those from IBM and Lexmark. For example, a Lexmark toner that Office Depot
charges NIS 825 for an original cartridge will cost the state only NIS 286.

Similarly, IBM laser toner refills will cost the government
only NIS 157 each, compared to NIS 907 for original cartridges.

In the detailed list of products and prices TheMarker has
obtained, refilled toners for Xerox or Epson printers do not appear at all,
only originals.

Treasury officials, who know very well about the huge
difference in prices between original and refilled cartridges, are encouraging
those responsible for government purchases in the various ministries and bodies
to try and save money by ordering only refills.

In addition, they emphasize that as part of the agreement,
Office Depot has promised that if the print quality of the recycled toner or
ink turns out to be substandard, or if their lifetime is shorter than the
original – the cartridge will be replaced immediately.

Office Depot has also committed itself to repair any damage
that the recycled goods may cause printers.

The factory at Kibbutz Afik on the Golan Heights will supply
the huge quantities of recycled print supplies to Office Depot. It will also
provide service maintenance for the printers, and other technical support.

The CEO of Afik Printing Products, Haim Slutsky, told TheMarker
that this was the factory’s biggest deal in 2006. He estimates that the state
has about 100,000 printers in operation, and that each office printer needs a
new toner or cartridge every month or two.

“This is a tender that will provide a lot of work for a
lot of families on the Golan Heights,” said Slutsky.

He said that about 30 of the 75 employees at the Afik factory
will be kept busy producing the supplies for the Office Depot contract.

However, there are those who think that using recycled products
is not a smart choice for the government.

These include Shai Tene, the CEO of Getter Tech – Lexmark’s
official representative in Israel.

“I assume that the government offices will try to work
with non-original toners, and then they will return to buying original toners
for cost-benefit considerations,” Tene explained to TheMarker.

“Office Depot and Afik will find it very hard to provide
guarantees for the printers at the customer’s site,” he added.

He also added that the present contract is valid only for the
existing printers now owned by the state. Office Depot’s contract does not
cover the new printers that will be purchased in the next state printer tender
this month.

The next state tender for printers is expected to be this
month. It is expected that international printer suppliers will offer the state
only package deals that will combine the printers with service contracts and original
print supplies as part of the deal. The purpose would be to block the entry of
firms offering recycled products in the tender.

[Author]

April 6, 2007 at 11:36 AM