Stage 1: Fairfax to shut NSW, Qld plants 'saving $15m-a-year'

Jul 18, 2018 at 12:28 am by Staff


Fairfax Media is to close two of its largest print sites, becoming effectively dependent on News Corp for production of some of its newspapers.

Chief executive and managing director Greg Hywood announced today that News will provide "a range of printing services" for Fairfax in New South Wales and Queensland, while Fairfax will print some publications for News at its North Richmond (NSW) plant.

New arrangements start this month, and Fairfax print centres in Beresfield (NSW) and Ormiston (Queensland) will close after the transition of work from them.

The decision settles the question of how the publishing rivals might share production in Brisbane, where both have excess capacity, News on its four ageing but recently-modernised manroland Newsman presses and Fairfax on a single but more modern Goss Uniliner line. Apart from local copies of its interstate titles, Fairfax has no daily newspapers of its own to print in Queensland.

Predictably, the changes will see News printing most or all of Fairfax's Sydney Morning Herald and NSW copies of the Australian Financial Review on its bigger Chullora presses with Fairfax taking advantage of distribution logistics from the site. Capacity will be freed at North Richmond to produce the Newcastle Herald and other work displaced from Beresfield, as well as some News Corp work.

With greater utilisation of its capacity - and the power which comes from owning your own press - it seems News Corp will be the clear winner from the arrangement, which sees Fairfax shut its last remaining Queensland printing plant.

It is however, only the first stage of agreements which are likely to include Victoria, where News has a "hot spot" in the production of its flagship Herald-Sun on some of its oldest equipment. A leaked report by consultants Deloitte earlier this year - described as "redundant" by both publishers - postulated installing a new press at Fairfax's Ballarat print site to provide capacity for work from News.

Print union the AMWU has been told of the NSW/Queensland agreements today, and News corporate affairs issued a statement this afternoon. In it News Corp Australasia executive chairman Michael Miller said the arrangements "demonstrate the company's confidence in the future of printed newspapers" and in the influence and impact of trusted newspaper journalism.

He said arrangements with Fairfax provided "benefits of scale and efficiency", and that News would continue to look at the most effective and efficient ways to produce newspapers. "This is a commercial deal which makes commercial sense by enabling better use of our existing print facilities."

Hywood says the arrangements make newspaper production more efficient for both publishers: "These are landmark initiatives. They demonstrate a rational approach to the complex issues facing the industry.

"Better utilisation of existing print assets makes sense and will deliver economic benefits to Fairfax Media."

He says there will be no change to the availability of Fairfax newspapers.

"The agreements deliver greater cost variabilisation, enabling us to produce newspapers well into the future. Our decision to rationalise some printing assets reduces capital intensity.

"We expect the combination of the new arrangements, and the changes to Fairfax's printing network to result in an annualised full-year benefit of approximately $15 million. Financial benefits are expected to begin towards the end of FY19 H1.

"From today we are consulting with staff at our printing centres affected by the new arrangements. Fairfax is committed to providing comprehensive assistance and support and will meet all our employment obligations. Fairfax and News Corp will continue to explore further opportunities."

Michael Miller says that - in addition to NSW and Queensland - talks are continuing "to develop further opportunities that ensure the competitiveness and viability of News Corp's mastheads".

Its statement points to similar arrangements where competitors share production facilities, notably in New Zealand, where NZME (not HT&E Media) prints some Fairfax newspaper titles in Auckland. News Corp's UK print operation Newsprinters prints daily newspapers the Daily Telegraph, Daily Mail and London Evening Standard.

Now we're some way to knowing what the "redundant" comment - of the leaked Deloitte report - means.

Peter Coleman

Pictured: Fairfax Media's Ormiston pressline

Sections: Print business

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