Recycling ribbons for computers prints out PROFIT

Peter Williams and William Schiffmacher are children of the 1960s who have successfully applied the concept of recycling to the computer age. As co-owners of Aspen Ribbons Inc., they created the business of recycling computer printer ribbons. And now they are turning their talents to manufacturing new ribbon cartridges for the thousands of printers that have proliferated in the wake of the boom in personal computer sales.

In 1973 Mr. Williams was selling printing computer terminals to various businesses. ''My customers' biggest complaint was ribbons - they used too many and were spending too much,'' he recalls. Then at a conference he met Mr. Schiffmacher, an engineer with a small company that re-inked ribbons for large, high-speed computer printers.

While the two were chatting, the idea of re-inking ribbons in the cartridges of smaller printers came up. The conversation ended in an agreement that Mr. Schiffmacher design and build a machine for this purpose. For a total investment of about $400, he came up with a machine that could re-ink ribbons right in the cartridge in 2 to 3 minutes. Mr. Williams began lining up customers, and Aspen Ribbons was born.

As the word got around that someone could recycle $9 to $12 printer ribbons for $2 to $3, their business grew rapidly. Today Aspen Ribbons employs 85 people , makes and recycles more than 200 types of computer ribbons, and expects to have $3 million to $3.5 million in sales this year.

With the advent of word processing, more people began using carbon ribbons, rather than inked nylon. Aspen Ribbons began ''reloading'' this type of cartridge with replacement ''pancakes'' - tightly wrapped spools of ribbons made of carbon-covered plastic film ribbon. This is a simpler process than re-inking, requiring only the refills and a knife to pry open the plastic casing. More and more people realized how easy this was and a small cottage industry sprang up. But recently some ribbon manufacturers have counter-attacked by welding their cartridges shut so they can't be opened. As a result, Aspen Ribbons decided to concentrate its efforts elsewhere, particularly in making new cartridges.

Most ribbon manufacturers do not bother with recycling their used cartridges. But ''we'll always keep this as part of our business,'' Mr. Williams vows. ''I'm not an environmental freak, but I'm a product of the 1960s and I think we've got to make better use of our resources,'' the businessman says. He adds, ''Besides, it's good business. We make our highest margins on recycling. The customer saves money. It's one of those rare cases where everyone benefits.''

The road to success for Aspen Ribbons was not an easy one. In 1979 a fire gutted the rented, two-story plant where the company was operating. Because it was only insured for 52 cents on the dollar, ''the easiest thing to do would have been to go bankrupt,'' Mr. Williams recalls. But he and Mr. Schiffmacher decided to stick it out and, in retrospect, says the fire was a blessing in disguise.

Helped by a $250,000 Small Business Administration loan, the two reorganized the company and decided to concentrate on manufacturing. Today they work out of 16,000 square feet in a building east of Boulder. Their comeback was the subject of a feature article last summer in Venture magazine.

Although ribbon recycling and manufacturing do not enjoy the high-technology cachet of manufacturing computers, Aspen Ribbons' operation uses surprisingly sophisticated technology. Specially designed machines automatically ink raw nylon ribbons, unspool them from their plastic cartridges, and respool them. Generally, the company now replaces the old ribbon with new rather than re-inking. For new cartridges, they mold many of their own plastic cases.

Currently, Aspen Ribbons is recycling 15,000 to 20,000 cartridges and making 50,000 to 70,000 new cartridges a month. In so doing it runs through 2 million yards of nylon ribbon, 100,000 plastic bags, and 90,000 plastic gloves.

These days new computer printers are coming on the market at a rate of about one a month. Almost all of these require a uniquely shaped ribbon cartridge. This allows the manufacturers to charge $10 or more for cartridges that cost only about $2 to produce. Aspen Ribbons tries to determine which printers will be most popular, designs replacement cartridges for them, and sells them for about $5.

The company's association with the computer industry and current profitability (it expects to clear more than $300,000 this year) have made it a prime target for venture capitalists. But parting with equity in the company in return for capital is not in the game plan, Williams says. They aim to build the company up to the level of $6 million in annual sales and then either sell it outright or go public.