Geon is consolidating its Seven Hills print
production into its site at Banksmeadow, and it will continue with its Dee Why
site. The Seven Hills apprentices and sales staff will be offered roles at Banksmeadow or Dee Why, but the rest of the Seven Hills staff will go. The
Seven Hills production equipment including its pair of ten-colour Heidelberg B1
presses will be distributed to as yet unspecified Geon sites.
Geon Group CEO Graham Morgan addressed the Seven Hills staff early
this morning, before setting off for other Geon sites to address staff. Morgan
is adamant that the closure does not mean a downturn in Geon's fortunes,
stating that the move is aimed at driving efficiencies and growth. He says, "In keeping with our ongoing strategy to
deliver exceptional service, consistency and quality to our customers, I can
confirm that Geon Seven Hills site will close. The consolidation of our NSW
manufacturing combined with dedicated and focused sales teams will provide
greater opportunities for our customers to grow through technology, innovation
and continued capital investment." Morgan concluded, "This natural evolution
will leverage the size of Geon – a leading visual communications organisation –
providing the business with a substantial competitive advantage".
Geon is having to work through a changed gameplan.Originally its strategy – that is Gresham Private Equity's strategy – was to buy up print companies, strip out costs, go for an IPO to get their cash back and then some. However the US subprime meltdown and consequent global credit crunch has meant the IPO has been blasted off the agenda, for the time being at least, which in turn means Geon's owner is having to look to print for its income, a far from easy task.
Geon's closure of Seven Hills will add to the
nervousness currently afflicting the print industry, which is largely due to
the country's biggest publisher ACP considering whether to start its own print
site, rather than spend $100m a year on printing its magazines. In addition
figures just released by the Australian Industry Group showed paper, printing and publishing activity contracted again in April.
The sector has now seen weak or negative growth for the past eight months, in
contrast with manufacturing overall, which continues to rise, albeit modestly.
The Seven Hills site was originally Don and
Noel Elliot and Noel Boltwood's showcase Agency Printing site, which they
established in 2001, and was equipped with two ten-colour
Heidelberg B1 Speedmasters and the latest prepress and finishing equipment. In
its day it was recognised as probably the most advanced printhouse in the
country. Geon bought Agency 18 months ago with the trio of former owners
leaving shortly after. Last year Geon merged Ron Hoolihan's Graphic World,
which it bought four years ago, into the site, and rebranded it Geon Agency
Graphic World.
Geon is the region's biggest sheetfed printer,
with annual revenue currently standing around the $400m marker. It operates
across Australia and New
Zealand, and has
some 1,600 employees. It stands at number five in the region's big five premier
league printers, behind web printer PMP ($1.35bn), web and sheetfed outfit IMPG
($670m est), web, sheetfed and digital printer Blue Star ($500m) and transaction
printer Salmat ($400m print)
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