A war of words has erupted between the Print & Visual Communication Association (PVCA) and one of Australia’s largest printers, Ovato, as the publicly listed company pushes ahead with its controversial survival plan.
An elaborate restructuring and recapitalisation plan was approved in the NSW Supreme Court on December 21 setting in train a series of outcomes that have drawn stinging criticism across the industry.
Four Ovato entities are now in liquidation, over 300 staff are seeking their entitlements through the FEGS scheme and a number of major creditors have agreed to be paid 50 cents in the dollar for outstanding invoices.
At the same time, the Hannan family and Are Media have tipped in $35 million to ensure Ovato Ltd – which mainly prints and distributes magazines and catalogues – can continue to operate.
In an article in The Australian on January 11, PVCA president Walter Kuhn, speaking on behalf of the Association, criticised the Scheme of Arrangement saying it would harm the industry and that suppliers would now seek to recoup their losses by upping their prices to other printers.
He also said Ovato had set a precedent, not just for the printing industry but for every industry.
Only way forward: Slaven
Ovato managing director Kevin Slaven, who is on the Executive Board of rival printing industry association The Real Media Collective, has responded to Kuhn’s comments saying the Scheme of Arrangement was the only way forward for the company.
Slaven said had it not been implemented, the whole Ovato Group would have been in administration with all 1200 jobs on the line.
“Therefore, it is astonishing, absurd and illogical that Walter Kuhn of the PVCA should attack the Scheme and claim it will damage the industry,” Slaven said in a statement to Sprinter.
“To make the assertion that suppliers will increase pricing to the rest of the industry to recoup losses is completely unfounded and without substance or logic. The suppliers who incurred financial loss through the restructure were very few in number and all of them voted in favour of the Scheme.
“All other Ovato suppliers were not affected and have continued to be paid in full.
“Instead of making negative and unfounded assertions, I would have thought Walter and his industry body should be a little more positive that we have saved 900 jobs in the printing industry which the PVCA was created to promote and support.
“Ovato stopped providing financial support to the PVCA in recent years because we considered them almost irrelevant to the industry. His recent comments have validated our decision. If the PVCA was confident about its analysis and predictions, perhaps it should have made a submission to the Court so that it could be scrutinised like our material. They failed to do so.”
Kuhn has told Sprinter the PVCA was unable to put its case before the NSW Supreme Court as it was not a creditor, and as such had no right. However, it had made its dissatisfaction known with the federal government.
Erroneous claims about impact: PVCA
The Print & Visual Communication Association has hit back saying it is wrong to say the Ovato restructure will not hurt the industry, adding some members have already said their terms of trade have been substantially restricted.
“Kevin Slaven’s ad hominem attack as response to economic commentary does not reflect well on him personally, nor does it reflect well on the culture of Ovato,” the PVCA said in a statement to Sprinter.
“Our industry association stands for best practice and excellence. Unfortunately the trajectory of Ovato does not exemplify either.
“It is erroneous to claim that there will be no deleterious impact on the rest of our industry from the Ovato restructure. Members have already reported that some vendors have substantially restricted terms of trade, up to and including 100% pre-payment terms, explicitly as a direct consequence of the actions of Ovato.
“The President of PVCA personifies the voice of our industry, through the Association. PVCA’s policy position on the restructure of Ovato follows extensive discussion and unanimous agreement of the PVCA Board, informed by member feedback to the board members.”
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