Three sites likely closing following PMP IPMG merger

With the PMP IPMG merger process underway there is an indication three sites, one each in in Victoria, NSW and QLD will be closed down. However PMP says no decisions will be made until the completion of the merger, board approval and appropriate consultation with the AMWU as stated in its enterprise agreement.

Peter George, managing director, PMP says, “We will be supporting all affected staff through these changes and will continue to work closely with our customers to ensure our quality of service and products remains at the highest standard, and as we deliver ongoing value to our shareholders.”

The company has already let a number of workers go from its head office. PMP is not confirming the names or locations of the sites likely to go.

Lorraine Cassin, national print division secretary, AMWU says, “The closures are disappointing. We are working with the company trying to save as many jobs as possible. We have an indication we are dealing with approximately 140 redundancies in NSW, with 125 in Victoria, and 35 in QLD.”

Cassin says the laid off workers will be compensated. “These workers are going to be treated with respect they have a good process in the enterprise agreement, which the company is abiding by, so they will have a significant redundancy package. Other workers in the industry that have been made redundant have not been treated as well, at least these people know they are walking out with something in the process.”

[Related: PMP revenue drops 20 per cent in Aus]

Part of the transformation programme now the merger is complete involves the restructuring of the reporting lines in the Australian business. The Australian business will be organisationally restructured and will be split into a Printing division and a Digital and Distribution division.

Adrian O’Connor, former executive general manager IPMG will run the printing division in Australia, a tough job given that PMP lost 20 per cent of its print revenue in Australia in the first six months of the year compared with the previous period.

The Digital and Distribution division will be run by Kevin Slaven, former IPMG Group CEO. He will be responsible for Letterbox Distribution, distribution ouitfit Gordon and Gotch, Digital – which made up around 10 per cent of IPMG revenue –  and book printer Griffin Press. James Hannan, former IPMG chief operating officer, will be responsible for operations across the Digital and Distribution division, reporting to Slaven.

The new PMP Executive structure brings together John Nichols, COO who is heading the transformation program; and Geoff Stephenson, CFO reporting to Peter George, managing director. The New Zealand business will sit separately in the structure.

PMP says its senior management roles will largely remain unchanged. The restructure will allow Nichols to focus on driving the transformation program through to its conclusion. Building a sustainable business going forward will undoubtedly mean the closure of some sites. Upon completion of consultation, it anticipates that this is likely to involve some immediate and further changes in the new financial year once further business reviews have been conducted.

PMP says, its investment in innovation and relentless drive for operational efficiency, combined with IPMG’s 130-year reputation for excellence and solving business challenges with a family touch provides its organisation with the scale, foundation and expertise to deliver the highest quality solutions and services for customers.

George says, “As an integrated business, our skills and breadth of experience across print, digital and distribution services allow us to continue to work with brands to make a genuine connection with the right audiences, no matter how complex the challenge. Any merger of such scale requires change. Some changes will be taking effect immediately, others to come.”

[Related: ACCC give green light to PMP IPMG merger]

Under the proposed changes, the majority of sales, estimators, schedulers and customer service people will not be affected. There are no changes planned in South Australia, Western Australia and New Zealand.

PMP says the goal of the merger is to establish a sustainable business in an industry undergoing significant change. This merger creates Australia’s largest print media marketing company delivering services across print, digital and distribution across a national footprint with revenues of more than a billion dollars.

As a result of the merger, PMP has acquired 100 per cent of IPMG and has issued new shares to IPMG shareholders, who now hold a 37 per cent interest in PMP and have two directors on the new PMP board.

The merger is expected to deliver $55m per annum cost synergies, with one-off cash costs totalling approximately $80m over the next 18 months.

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