Massive consolidation rocks Sydney's printing industry
GEON closes down Agency Graphic World in a major shift of production capacity.
Over 90 jobs were lost this morning when GEON, the region's largest sheetfed printing company, surprised the industry by shutting its Seven Hills factory. The private-equity backed giant is consolidating production to its two remaining Sydney sites at Banksmeadow and Dee Why.
The Agency Graphic World presses, including two Heidelberg 10-colour perfectors, will be distributed throughout the group's widely dispersed sites in Australia and New Zealand. Sales staff are being relocated in Sydney, while the team of apprentices are being offered places in Dee Why or in Banksmeadow. Production will cease at Seven Hills on June 6.
GEON group CEO, Graham Morgan (pictured) is aware of the impact of the Agency Graphic World decision but defends it as a necessary move in order to gain extra efficiencies and promote growth for the company. "There are no financial issues involved here. Our decision was based solely on what is best for the future growth of our New South Wales operation."
He makes the point that the company is still investing in equipment and software across its sites, citing the recent $3 million finishing upgrade at Banksmeadow. The re-allocation of the presses from Agency Graphic World will immediately drive growth in other GEON sites.
"We have more demand than we have presses to meet it. All the equipment is already allocated," said Morgan. "Although this may seem a negative it will actually result in more growth for the company."
Recognising the impact of the shut down on the employees Morgan addressed both the night and day shift at a 5.30 am meeting this morning at Seven Hills. Career transition consultants and Print Super were on hand to assist employees with career and financial issues.
Morgan then held a telephone link-up with management and staff across GEON's 33 buildings in Australia and New Zealand to explain the decision. He is now traversing Sydney to personally meet with the staff of AP Mail in Parramatta and Dynamic Press, Dee Why.
The shock closure is the latest in a swinging series of redundancies following industry reorganisation in Sydney. In recent weeks Blue Star Printing, the other PE-back aggregator, has sacked a substantial but unspecified number of employees following its takeover of McMillan Printing.
A little bit of history
Ron Hoollihan's old company, Graphic World, was the first Sydney printer to come under the control of the then New Zealand-based raider, Pacific Print Group in 2004. Agency Printing was bought from brothers Don and Geoff Elliott and Noel Boltwood in 2007 just as the group was rebranded, GEON. The two were consolidated into Agency Printing's Seven Hills site last year.
The corporate-defining acquisition of rival consolidator Penfold Buscombe 17 months ago with its large printing site at Banksmeadow meant there was always going to be a question mark over the viability of the Seven Hills plant. The addition last year of the van Weeran family-owned Dynamic Press in Dee Why only added to the dispersion of production sites.
Graham Morgan acknowledged the tough market conditions affecting Sydney and the lower prices impacting on the industry but accepts it as just what the customers are demanding. "Yes, the market is challenging, but there is plenty of work out there. We all have to meet our customers' expectations."