Ovato plans to consolidate NZ into Auckland
Ovato is planning to close its Christchurch print plant, and move all New Zealand printing to the main Auckland print centre, as the company continues to rationalise its business.
Subject to the proposed closure going ahead, some 60 staff at the Christchurch plant will lose their jobs, although the union has said the company will honour full contractual entitlements as well as offering additional support to those affected staff through its Employee Assistance Program (EAP).
Ovato told staff yesterday of its plans, then allowed staff to go home for the rest of the day to digest the news. Many staff are long serving, with up to 40 years on the shop floor. The union said the news was not a big surprise, given the declining volumes going through the plant since Covid.
Ovato’s New Zealand business saw its revenue fall down by $6.1m to $83.9m in the 12 months to June, although EBITDA was up by 69 per cent, to $2.2m, thanks to tight cost control and government Covid subsidies, which offset lower print volumes.
Ovato has also received the nod from the New Zealand Commerce Commission for the sale of its distribution business ORD NZ to Are Media. The deal has now gone through, with Are Media paying $5m, and taking on the $4.5m debt.
ORD NZ was the final non-print asset that Ovato has divested from, leaving it as pure printing business. The buyer, Are Media, is the former Bauer Media Group, the biggest publisher in New Zealand, and in Australia, where it also bought the former Gordon & Gotch business from Ovato.
Are Media is now a fully vertically integrated business, with publishing, distribution, and print, thanks to its 16 per cent ownership of Ovato and its own owner Mercury Capital’s majority ownership of Webstar, the other main New Zealand heatset printer.