Earlier today, Fairfax Media Limited and APN News & Media Limited announced a proposed printing agreement that will see a consolidation of the pair’s printing processes in the upper North Island.
Under the arrangement, APN’s Ellerslie facility will provide printing services to Fairfax in New Zealand for several newspapers, including the Waikato Times, Sunday Star-Times, Sunday News and other community titles.
“The deal has not yet been finalised although the high-level terms have been approved,” says an APN spokesperson.
APN was asked when the deal will be finalised, but the spokesperson chose not to comment on any further specifics.
It is thought that the parties still need fulfil the pre-requisite requirement of informing the Australian Stock Exchange before the deal becomes official.
Given the continued decline of print, this move has been introduced as a cost-cutting measure to make the distribution of the respective papers more affordable.
The move will see the work currently performed at Fairfax’s Auckland and Hamilton print sites transition to APN’s Ellerslie facility within three months starting from August 2014.
“The arrangement with Fairfax allows APN to utilise spare capacity at our state-of-the-art Ellerslie facility and deliver further cost savings,” said APN’s chief executive Michael Miller. “We are on track to achieve our target of a further $20 million in cost savings across APN’s publishing businesses in 2014.”
Fairfax Media chief executive Greg Hywood pointed out that the agreement makes financial sense for both companies.
“Sharing a print site with a competitor is fairly common practice in overseas markets,” said the Fairfax head. “In this instance we boost our print capability in the upper North Island market without the need for significant capital investment and gain significant benefits from the additional scale and efficiencies.”
But this could come with bad news for some of the staff employed at Fairfax’s Auckland and Hamilton print sites. At this stage, spokespeople from both media conglomerates have chosen not to comment on the possiibility of staff cuts, but they do seem likely given focus on cost-cutting measures.
“The focus is on consultation with staff and no further comment [will] be made until that is concluded,” says the APN spokesperson .