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PMP Print seeks permission to buy APN's Manukau heat set printing business

Friday 5th November 2010

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PMP Print, which produces catalogues, magazines, books, directories and newspapers, has applied to the Commerce Commission for clearance to buy APN News & Media’s Manukau heat set printing assets.

Both parties are presently offering heat set printing services to magazine and catalogue publishers, and the Commission’s role is to determine whether competition will be substantially lessened.

APN, which publishes the New Zealand Herald and owns the Radio Network, announced last month that it would close down the loss-making magazine printing operation in Manukau and had entered a 10-year outsourcing arrangement with ASX-listed PMP, which would become the publisher’s exclusive provider of gloss printing services.

APN has been trying to sell the Manukau plant, which is geared towards the production of higher-end colour publications, after sustaining losses for a number of years. One option for APN is to close the business and attempt to individually sell the printing assets.

In its application to the regulator, PMP said there is sufficient market capacity to meet the needs of all publishers, as well as competition from sheet feed and cold-set printing to continue to provide sufficient competition. The company said the fact its business is printing and publication distribution, rather than publication creation, is a further argument against potential lack of competition.

PMP’s application follows a period of printing industry financial struggle, exacerbated by the internet’s growing presence. In July this year the company lost a contract worth about $40 million a year when ACP NZ switched to the Blue Star Print Group.

The commission’s decision is due in two weeks.

The printing industry encompasses about 1,200 business, employing almost 10,000 fulltime employees with a turnover of about $1.9 billion a year.

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