It marks the second recent boost for PMP following last month’s news that it had won the catalogue distribution contract for Target, the biggest such contract in the country.
PMP chief executive Richard Allely told ProPrint that PBL’s decision to scrap its plans was “encouraging” for the industry.
“From a printing perspective, it’s encouraging that a publisher is not going to put capacity into the market that the market is already capable of serving,” said Allely.
“It gives PMP and other players in the industry an opportunity to now invest in their productive capacity to meet the demands of this complex publisher,” he added.
He also expanded on PMP’s recent Target win. “It’s a significant milestone for us. It certainly put the distribution issues to rest.”
Last year, the company was also forced to own up to “irregularities” in its Distribution business, admitting it had supplied customers with incorrect delivery statistics, following an inquiry by the ACCC.
Allely added: “And the ACP decision not to proceed with its own printing and distribution centre, that’s got to be read as positively from a PMP perspective because we are the largest magazine printer in the country. To have the largest magazine publisher in the country not proceed with their own infrastructure has got to be a positive for us,” he added.
According to a report in today’s Financial Review: “PBL Media… had now reached new, lower pricing terms with PMP and other printers”.
Allely admitted that PMP had been in ongoing discussions with PBL.
“It’s fair to say that because of the longstanding relationship with PMP and ACP, it would be naive to think that the two organisations hadn’t been in conversation for some time.
“Clearly from a PMP perspective, we see ACP as being strategically a very important client and one that we would want to support for the long term,” said Allely.
While Allely would not be drawn on its pricing arrangements, he said that PMP and IPMG were the only two printers in the country capable of meeting ACP’s requirements.
“If you expect significant price benefits in a duopoly, that’s a courageous expectation.”
ACP is said to account for 6% of PMP’s revenue, making it the print group’s largest magazine client, though Allely said PMP had bigger clients in the retail arena.
“Lots of people think that ACP represents a significant chunk of PMP but the reality is they only represent 6% of our revenue,” he added.
Allely reiterated his past criticisms of the ACP plan, saying that he “struggled with the economics”.
PBL Media announced plans for the printing plant back in 2008, at which point then PMP chief executive Brian Evans said: ” “I think their views of savings in the industry haven’t been accurate, and time will tell how successful they are.”
The magazine giant seemed to be forging ahead with its strategy as recently as February this year, when plans were revealed of a 200-staff, 54,000sqm plant in the western Sydney suburb of Smithfield.
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