Northern Territory print businesses are set to benefit from the government’s decision to close its $6m-a-year printing office next month, with work already starting to roll in to printers across the area.
The printers say the Territory government is trying to share the mostly large offset work around evenly to local print businesses, rather than going to big national firms.
The NT Government print office will close on May 8 after 36 years of operation because it had become seriously unprofitable, losing $761,000 last financial year, and when the decision was announced last December it had already lost $500,000 for FY14. Some 31 staff will lose their jobs or be redeployed.
The government says an open public tender process will be undertaken over the next few months to establish a multi-supplier panel contract that will handle most of the annual $6m worth of printing work.
For the time being, the printers on an existing contract to handle 25 per cent of the government's print work will carry the load until it expires later this year.
"The NT Government has a commitment, through its procurement process, to support local industry," a government spokesperson says.
"The current contract is made up with a majority of local suppliers and Territory businesses. This is not expected to change with the new contract."
Local company Zip Print managing director Mark Teakle says while it is early days because quotes and tenders have only been going for the past three weeks, he is already working on several jobs, and expects it will eventually add 20 per cent to his turnover.
“The print office did millions of dollars of work every year and we are just seeing that come into the marketplace, so I think it’s going to be a significant boost to the local industry down the track,” he says.
[Related: More NT news]
However, Teakle says the price war that is affecting much of the Australian industry is rearing its head with several businesses engaging in significant undercutting.
“I think one of the reasons for price cutting is to keep printers in the rest of the country out, but I’m not going to play that game,” he says.
“I won’t cut prices to follow the market, the margins need to be worth doing the work so if it gets too bad I’ll just grab the occasional job.”
Teakle says the new outsourced work will help take his growing business to the next level.
Hollands Print Solutions manager Dudley Hollands, a 40-year NT print veteran, expects the government work will increase his turnover by 10-15 per cent.
“We are just seeing the tip of the iceberg now, mostly it’s just been urgent jobs because others take time to get approval,” he says.
He says the government is still working out its tendering system and has kept the industry well informed of developments. He expects work will increase significantly once the office fully closes.
“It used to do 200-300 jobs a month so that’s a lot of work to flow into the industry, but there are enough printers to handle it,” he says.
“Printers in Darwin have bought a lot of new kit recently so they have the gear to handle it, everyone is going to benefit, especially those working on health and education jobs.
“The government is also really good at paying and unlike the rest of Australia they work on two-week invoices.”
[Related: More government work news]
Meanwhile the government is selling off the kit, asking for tenders via Pickles Auctions to buy a 2011 Heidelberg Speedmaster SM52-5-P five colour offset press with perfecter, a 1998 Heidelberg Speedmaster SM102-2-P two colour offset press, a 1997 Heidelberg GTO 52, a four-unit 2006 Heidelberg Stahlfolder folding machine, and a 2006 Kodak Magnus 800 CTP.
The rest of the kit and other production and office equipment will be auctioned on site in early June.
Teakle questions why the government invested in the $700,000 five colour offset press only 2.5 years ago instead of buying more digital as that is where the market is headed.
“I think that was a big mistake and I’m surprised they did it, it must have contributed to the closure,” he says.
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