PBL Media punts on surplus press capacity

$100 million magazine print up for grabs as magazine publisher pulls out of ill-fated print venture.

The decision by PBL Media not to proceed with its own magazine printing will spark renewed interest in one of the most competitive sectors. The surplus amount of web printing capacity convinced CEO Ian Law that he could spread Australia’s largest magazine contract among web printers, including PMP, APN, IPMG and AGW.

In an interview with the Australian Financial Review, Law explained the factors leading to the company’s decision, which has been met with scepticism from day one. “We are now confident that our future production requirements can be met by a number of suppliers at a very competitive rate,” he said.

“We also now have higher priorities for our capital at this time, including the digitisation of Nine, and the completion of a new play-out and presentation facility for the network.”

In 2008, Law announced the company’s intentions to build its own print centre in a bid to reduce costs. "We have undertaken an exhaustive analysis of the printing options available to us and it became clear during the process there were compelling reasons to take control of the production of our publications," he said.

The site was expected to be completed by 2011.

Both former and current CEOs of print and distribution company, PMP, Brian Evans and Richard Allely respectively, which prints the majority of ACP’s magazines cast doubt over the decision.

“These guys aren’t printers,” former CEO, Evans said.

PMP managed to cover itself for the next few years by signing a three-year extension to its printing contract with ACP magazines on more favourable pricing terms and guaranteed volumes. The contract stated that it would revert to a five-year print agreement if ACP does not proceed to a greenfield site within the specified timeframe.

A confident Allely (pictured)  believed that PMP could hold its own even without the ACP contracts in the long-term. “My optimism for the print division holds true even if ACP goes ahead with its plans to establish its own printing facility. PMP currently enjoys modest revenue and earnings out of ACP, but we remain confident of being able to replace this with alternative business,” he said.