Jobs to go in PMP strategic review

Major savings in labour costs will account for more than 50 per cent of the projected $30 million savings in the 32-point restructure proposed by Bain International. David Kirk, PMP’s new chief executive, launched the review of the company’s capacity and production processes this week, after initially putting it off until June.

Heatset web printing is identified as a strong core activity for the region’s largest printing company. The strategic plan calls for further investment in the sector, with the aim of PMP becoming the lowest cost producer.

“Despite clear market leadership in heat set web printing, PMP's cost position is weak relative to key competitors, so we are moving quickly to strengthen it,” said Kirk. “This is not a program of downsizing. It is about avoiding costs in areas such as paper damage and waste, improving efficiencies in terms of better scheduling our capacity, and better integrating our sales and production processes.

Coldset and sheetfed printing are both regarded as weak performers. The strategic intention is to either significantly improve the coldset stand-alone operations or exit the sector. This is in line with the closure of the Hawthorn, Vic. coldset printing plant last month.

Although the company’s sheetfed operations are also regarded as weak performers, they have important connections to other PMP businesses, such as ShowAds, and the strategic aim is to try to improve the sector’s short-term performance.

PMP New Zealand is a strong performer, which the company plans to invest in and grow to improve performance. Other strong performers positioned to attract extra investment for growth are Griffin Press, the book printing division, and PMP Distribution.


While ShowAds is also recognised as being in a strong position, there are no plans to invest in the division. Rather the intention is to continue with the cost reduction programme already underway to extract extra savings, mainly in terms of labour costs.

"We have already moved to improve the value of our portfolio. Show Ads is completing a major restructure to improve its position and align it more closely with PMP Print. Gordon and Gotch are currently implementing a total process re-engineering program and an ERP system. At a corporate level, we are moving to a shared services model and working to lower compressible costs. Within Print, we have already closed our unprofitable Hawthorn site," said Kirk.

Both Gordon & Gotch, the distribution business, and Pacific Micromarketing are regarded as having moderate strategic positioning, with the plan being to improve G&G’s cost structure and go after industry rationalisation.

"With a view to implementing the performance disciplines of a market leader we have recently created and filled the new position of Group
General Manager for Business Practice and Performance. This person will drive performance management, accountability and people,”
said Kirk.