The arrival of a second 80-page manroland web press next year at the Huntingwood greenfield site of Franklin Web is set to alter the balance of power in the hotly contested heatset web market.
The surprise announcement from IVE reflects the rebalancing of the expanded company’s web power with the new Sydney site almost matching the capacity of the established Sunshine plant in Victoria. The new press is likely to be another Lithoman, similar to the one currently being installed at the new facility. Its arrival threatens to spark more price competition between Ive Group and PMP.
The fiercely competitive sector is fundamentally driven by price according to Peter George, managing director of PMP. “Anyone who thinks they’re going to win new work other than by a lower price is deluding themselves,” he said in a recent interview with Print21. He described the previous five years before the recent round of sector consolidation that saw five players reduce to two as “a price war as vicious as anything I’ve ever seen.”
He ascribed the sector’s long-term low profitability to “too many presses chasing too little work.” The sector has an estimated the overall volume at around 400,000 tonne per annum that has proved relatively stable.
PMP has just rationalised the press fleet it inherited from the acquisition of IPMG. It has removed older machines and transited its Sydney catalogue work to Warwick Farm to the big 96-page manroland Lithoman press, the largest in the country, at the old IPMG site. George says the company has no plans for further capital investment in presses for the foreseeable future.
Ive Group has also rationalised its press fleet following the merger between the Melbourne-based Franklin Web and AIW. The big 80-page Goss Sunday 4000 system was moved to the Sunshine site but no new presses were purchased for the southern capital.
The first 80-page press at Huntingwood is expected to start producing in October, taking the pressure off the Melbourne plant. The second press at $22 million (with ancillary equipment) is being funded by part of the successful $55.6 million capital raising undertaken by Ive Group. It is expected to go live in August 2018.
Time will tell whether catalogue customers or heatset web printers will come out as the winners from such a huge increase in capacity