Kalamazoo will not be another Geon: chief exec

Kalamazoo has admitted to “cashflow problems” and mass redundancies but has shot down industry speculation about its future.

Chief executive Glenn Climo told ProPrint this morning: “Kalamazoo is trading in a positive position. We do have cashflow problems at the moment, but other than that it’s positive. All these rumours, I don’t know where they’ve come from.”

Climo said the group’s cashflow difficulties were a “short-term” problem.

“The measures being put in place will improve the cashflow position. It will come positive within two or three months’ time. It’s only a very small thing,” he said.

“If I didn’t believe there was a future here, I wouldn’t be here.”

He also dismissed rumours that Kalamazoo had been offered to potential buyers. “Kalamazoo hasn’t been put around for sale. We’re looking for a capital injection and that may be through an equity partner, but the Kalamazoo group is not for sale.”

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Climo said Kalamazoo’s difficulties had been partly caused by a decline in demand and overstaffing.

He said the group’s ongoing restructure had resulted in a drop in staff numbers from 480 in 2012 to 300 now.

The restructure has included a strong digital push, which has been initiated ahead of schedule, he said.

“We’re going to take that further as well. We don’t see the sense of investing in hard metal anymore when the marketplace is demanding short-run, quick-turnaround work.”

Climo said management and staff had remained positive despite the “damaging” speculation. He added that Kalamazoo had received “tremendous support” from key supplier Fuji Xerox NZ.

ProPrint has received a copy of a letter that Climo sent in mid-October to Kalamazoo’s main clients.

He said in the letter that the restructure would “future-proof the company and create a platform for the next phase in the company’s growth”.

“The print industry is going through rapid change at the moment and many of our competitors will no doubt be sowing seeds of doubt in your minds after the demise of companies like Geon,” he said.

“I want to reassure you that the changes we have made have the full support of our key technology suppliers, our bankers and our staff and we continue to invest in new technology and new lines of business to make sure [Kalamazoo] continues to offer its customers the highest possible levels of service.”

[Exclusive: Geon insider speaks out]

Climo’s letter also said that the group’s acquisition-fuelled growth during the past three years had exposed flaws in its management system.

“[What] has become apparent is that the management and governance structure that was effective for running a small family-run company was not effective for the new [Kalamazoo] which is a NZ$60 million ($52 million) business, employing over 300 employees across nine geographic locations,” he said.

“We have therefore made a series of management and structural changes which we believe will make the company more agile, more profitable and better suited to meet the changing needs of our clients.”

The turnover figure in Climo’s letter appears to contradict what Kalamazoo owner Steve D’Souza told ProPrint in 2012.

D’Souza said then that the group had a turnover of NZ$130 million. However, he told ProPrint this morning that that had referred to both his New Zealand and Indian business interests.

D’Souza also said that Kalamazoo was in a sound position.

“It traded well in the month of September and it can trade well moving forward too. There’s a lot of light at the end of the tunnel. There’s confidence in our customers and our suppliers,” he said.

“The printing industry needs a change in how it’s handled. You need to make some drastic changes and we’re making those.”

[Feature: Avoiding the bad debt domino effect]

Kalamazoo New Zealand has no connection to Kalamazoo Australia based in Perth.

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