*NEWS*LASERCYCLE DIVIDES TO CONQUER

[Anonymous]

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 10:05 AM