Up to 200 local jobs are in jeopardy with Hannanprint considering the closure of its Dubbo operations.
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Staff at the Wheelers Lane printing site, one of the city’s major employers, have been told that the company is questioning the viability of its present business structure.
It is considering closing the Dubbo operations and moving “some of its equipment and most of its work” to Sydney.
The proposal to close the business in Dubbo was described as the “best suited to the current environment” of four options being considered for Hannanprint’s future, a notice to staff stated.
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Staff were told that the loss of printing contracts including Woman’s Day and the BBC Hardware catalogue, along with changes that meant the Sun-Herald’s TV Guide and Sunday Life insert had to be printed in Sydney, had contributed to the need for a restructure.
“The current preference by some of our major customers to print their products in metropolitan locations” and “the large investment in plant and equipment required to re-equip our Dubbo site”, were other factors, the company stated.
Three alternatives to shutting down the local operations were flagged in the notice, including reducing the number of jobs at both the Sydney and Dubbo sites, trying to replace lost work, or transferring work from other areas to Sydney and Dubbo.
However sources revealed that the last two options were not being seriously considered.
Hannanprint told the staff that a consultative committee, including representatives of affected staff and their unions, would be formed before a final decision was reached.
Staff would be notified of the decision on the morning of December 4, the notice said.
The company was tight-lipped about the issue yesterday, with Dubbo operations manager John Bond saying only that the business had entered a “consultative phase”.
Mr Bond said he could not guarantee that no local jobs would be lost.
His comments were echoed by the CEO of the printing division of Hannanprint parent-company IPMG, Stephen Anstice.
“We are not commenting on anything other than to say we have entered into this process,” Mr Anstice said.
He said that the loss of the contracts and the changes in its arrangement with Fairfax for the Sun-Herald contracts had caused “a fairly dramatic impact on our business”.
Mr Anstice said there were “about 200” people employed at the Dubbo site, which included casual staff. He refused to speculate about the future of the company’s local workforce.
The news came just weeks after the business celebrated winning a Silver Rhino at the Dubbo Chamber of Commerce and Industry’s business awards ceremony.
The company took out the award for outstanding innovation in business for its introduction of a management system, performance monitoring and key performance indicators.
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In the mid 1980s Macquarie Publications expanded both its newspaper publishing and commercial operations. It acquired daily newspapers in Goulburn, Bathurst and Orange and the Melbourne commercial printing company Quadricolor.
At the end of the decade, however, John Armati decided it was time to make a choice between magazine printing and newspaper publishing. He chose the latter selling the magazine printing business to the Sydney-based company Hannanprint in 1991.
The Armati family continued to publish newspapers until 1996 when the business was sold to Rural Press.
Hannanprint continued development of the Dubbo operation expanding its print capacity and staff.
Four important contracts appear to have changed the ability of Hannanprint to keep open both its Sydney and Dubbo operations.
Earlier this month Hannanprint Sydney ceased to print Woman’s Day, after its owner ACP Publishing opted for a “big new size” edition. For 10 years Hannanprint printed Woman’s Day as a quarto-sized magazine but did not have the capacity to print the 700,000 run magazine in the new A4 format.
The takeover of Howard Smith by Wesfarmers resulted in the loss of another major contract. Hannaprint Sydney lost the printing contract for BBC Hardware’s catalogues.
Dubbo also lost two important contracts: the Sun-Herald’s Sunday Life magazine and the TV Guide. Hannanprint has maintained both contracts but both publications will be printed in Sydney.
The losses, while not affecting the Hannanprint business as a whole, will “produce major excess capacity at the Dubbo site”.
The problem for Dubbo is twofold, management has told staff.
The first is the potential at the Dubbo site for market growth “already limited by the competitive nature of the market”. It is further compromised by the preference of major customers and potential customers to have their products printed at metropolitan locations.
“Many of our customers continue to maintain a preference for their work to be done in the Sydney metropolitan area,” a notice to staff says.
The second issue is the quality of product being produced in Dubbo which is being affected by the age of equipment and supporting infrastructure.
Management has told staff that to deal effectively with “these issues” would require a large reinvestment in plant and equipment at the site “with a large associated up-front cost”.
“This is very difficult to justify under these circumstances,” the notice says.
Which is why management is looking at closing the Dubbo site, relocating presses and other equipment and some jobs to Sydney. When and if that happens will be known on the morning of December 4. The next three weeks will be a very nervous time for some people in Dubbo.