Print giants Fairfax and PMP are finalising major production reorganisations that will see multiple plants close as both companies deal with weakening demand and falling revenues.
Fairfax’s Chullora and Tullamarine plants will shut down by the end of June, with the equipment and work transferred to the company’s regional Ballarat and North Richmond facilities.
Meanwhile PMP has managed to sell the final portion of its Clayton, VIC plant to syndication business Sierra Leyton in a $7.75m deal.
Fairfax printing and distribution group director Bob Lockley says the building at the regional sites will be extended to accommodate the increased print volumes and equipment upgrades, with post-press and publishing room equipment from Tullamarine moving to North Richmond and some of Chullora’s equipment headed for Ballarat.
The old printing equipment will be complemented with some new pieces, including a $30m, three-year contract with Fujifilm to provide new CTP equipment.
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Lockey says the upgrades and transfers have already commenced and will be completed by June 30 at the latest.
“Our Petone publishing room equipment is also about 30 years-old, and we’re upgrading that with Ferag equipment out of Tullamarine,” he says.
“That’s going to start at the same time so we aim to have the whole project up and running by the end of this calendar year.”
The upgraded sites will publish Fairfax’s flagship titles like The Age and Sydney Morning Herald, which have just fully switched to compact format, as well as new independently-owned newspaper The Saturday Paper which launched on March 1.
Lockey says the plant reorganisation is a result of declining print volumes resulting from plummeting circulation, down 14 per cent for The Age and 16.3 per cent for the SMH, as newspaper sales across the country take a beating.
“The plants were great in their day but are now not being fully utilised, so we need to rationalise our operations,” he says.
He says Fairfax is investigating digital printing or using inkjet heads on existing conventional equipment.
“We’ve been looking at [digital] for many years now and it’s becoming more cost-effective,” he says.
There is also a vague possibility with cooperating with News Corp Australia on printing operations at some point in the future and discussions are ongoing.
PMP's Clayton pant sale brings Australia's biggest printer's sale and leaseback campaign to an end, generating $74m of an expected $75m as it tries to raise money to recover from successive years of losses. The company finally returned to profitability in HY14 thanks to significant cost cutting.
PMP has taken a 10-year lease over the 12,166sqm facility, situated on a 31,873sqm site, at 209-211 Carinish Road.
The sale was facilitated by CBRE's Angus Klem and Rory Hilton. Klem says: “Through a sale and leaseback program, companies can release funds, retain long-term occupancy of their sites and deploy capital more efficiently.”
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