APN Print NZ Ltd's heat set printing business in Manukau has been making considerable losses for a number of years, an application to the Commerce Commission for the sale of its assets to PMP Ltd says.
Australian-owned PMP is seeking clearance to acquire the Manukau heat set printing assets of the unit of APN News & Media Ltd.
The assets being sold include a Goss M600 printing press manufactured and installed around 1996, and a Muller Prima Tandem stitching line. They are not required to service a previously announced print services agreement between PMP and APN but APN wanted to sell the assets.
APN said last month that PMP will become its exclusive provider of gloss printing services under a 10 year contract in New Zealand and APN's Manukau plant will close at the end of November with about 150 staff affected.
The application to the commission said that in light of the losses being sustained by the business APN decided to close it, sell the assets and satisfy printing requirements from outside the group. The business prints magazines, periodicals and retail catalogues.
PMP secured the contract to print APN's titles and is acquiring some assets. If PMP did not buy the assets they would likely be sold to Webstar, a business unit of Blue Star Group Ltd, and the other main heat set printing business in New Zealand, or be decommissioned.
"There is sufficient capacity in the market to meet the needs of all publishers, plus there is competition from other printing processes, sheet fed and cold set, in respect of portions of the printing work performed by heat set printers," the application said.
Both PMP and APN had lost third party work to Webstar.
The application describes the APN heat set printing business as a failing business unit.
The market for magazine and catalogue publication has declined by 25 percent over the last five years as clients move to the internet and digital products.
3Media Publishing, Jones Publishing, Aster Publishing, Carnation, Saltaire Publishing, Action Media, Wish Publishing and Infego all failed, closed or were rationalised into other publishers' activities, the application said.
The other heat set printers are Webstar, Ashburton Guardian and APN's Tauranga facility. Cold set printers include Fairfax, APN, Horton Media, and Ashburton Guardian.
The sheet fed printers are predominantly Geon and Bluestar Print Group, and there are smaller competitors.
